Looking at the quarterly picture, sales volumes fell by 0.8% in the three months to September 2023 when compared with the previous three months.

Non-food store sales volumes fell by 1.9% in September 2023; retailers reported that the fall over the month was because of continuing cost of living pressures, alongside the unseasonably warm weather reducing sales of autumn-wear clothing.

Non-store retailing (predominantly online retailers) sales volumes fell by 2.2% in September 2023, following a fall of 0.9% in August. Food store sales volumes rose by 0.2% in September 2023, following a rise of 1.4% in August 2023.

Automotive fuel sales volumes rose by 0.8% in September 2023, rebounding from a fall of 1.0% in August 2023.

Kevin Brown, savings specialist at Scottish Friendly, highlighted that shoppers are getting “far less bang for their buck as they continue to spend more in return for less.”
Commenting on the figures, he said: “Retail sales volumes fell by 0.9% in September as shoppers cut back significantly on non-food purchases.

“The figures show a growing divergence between how much people are buying and the amount they are spending. For example, compared with their pre-coronavirus pandemic level in February 2020, retail sales values are 17.1% higher but volumes are down 2.5%.

“These figures demonstrate how the rising cost of living is impacting living standards in the UK. Inflation is severely reducing families spending power and limiting how much they can afford to buy.

“Food and fuel remain the priorities as shown by the increase in sales, but beyond that most other retailers are suffering as households continue to tighten their belts.

“Retail sales are likely to remain depressed over the winter months as the cold weather pushes up the cost of families’ energy bills and more homeowners move on to more expensive mortgage deals.”

Martin Beck, chief economic advisor to the EY ITEM Club, added: “Retail sales volumes fell 0.9% month-on-month in September, meaning that August’s modest rebound proved only temporary. Lower sales in September were driven by large falls in the non-food and non-store retailing sectors, with the Office for National Statistics (ONS) suggesting that warmer weather weighed on clothing purchases. These falls more than offset a marginal rise in food sales, while fuel sales also increased slightly.

“September’s decline left sales down 0.8% quarter-on-quarter in Q3. And the EY ITEM Club thinks retail sales are likely to underwhelm over the rest of 2023 as the impact of higher interest rates grows. An increasing number of mortgagors are reaching the end of fixed-rate deals and face a significant increase in debt servicing costs when they refinance. As a result, the drag on household disposable income from this source is set to increase. And evidence of a weaker jobs market likely won’t help either, with unemployment rising and demand for workers appearing to be decreasing.”

He concluded: “For sure, there are some glimmers of hope for retailers. Consumer spending power should be supported by lower inflation and average wages now rising again in real terms. And the financial position of households, in aggregate, is relatively healthy, reflecting unplanned saving during the pandemic and a paying down of unsecured debt in recent years. But the EY ITEM Club is sceptical these factors will be enough to outweigh the large impact on disposable income from higher borrowing costs that’s gradually passing through to households. Therefore, sales are likely to remain sluggish at best for the foreseeable future.”