Retail sales down in September despite petrol panic buying
Economists had expected retail sales to go up by 0.5% despite the rising cost of many essentials. However, supply chain issues and consumer confidence impacted sales. The ONS data showed rising sales in just two categories – food and fuel.
Automotive fuel sales volumes rose by 2.9% in September 2021 as people panic-bought petrol; volumes were 1.8% above their pre-pandemic February 2020 levels.
Non-food stores reported a fall of 1.4% in sales volumes in September 2021. This was due to falls in household goods stores (negative 9.3%), such as furniture and lighting stores, and other non-food stores (negative 1.7%) such as sports equipment stores.
Food store sales volumes rose by 0.6% in September 2021 and were 3.9% above pre-coronavirus pandemic levels in February 2020.
Despite the relaxation of Covid-19 restrictions in summer 2021, in-store retail sales remain subdued; the proportion of retail sales online rose to 28.1% in September 2021 from 27.9% in August, substantially higher than the 19.7% in February 2020 before the pandemic.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “There was a September surge in clothing sales, as shoppers back from staycations revamped their wardrobes ready for an Autumn of socialising. With all restrictions on partying dropped, consumers splashed out on styles to go out out once again. More staff have hot footed it back to the office after an 18-month break, so it’s likely revamping work wardrobes was also a priority.
“But the surge in fashion sales weren’t enough to stop an overall drop in retail sales of 0.2% in September. Shoppers were more cautious, amid a surge in energy costs, with warnings that higher prices are on the way. This is yet another sign that the economic recovery tailed off in September, with confidence ebbing away among consumers.”
Kevin Brown, savings specialist at Scottish Friendly, said: “Household spending bounced back quickly after Covid restrictions eased and stores reopened earlier this year, but it is now clear that consumer confidence is waning.
“Businesses will be hoping for an upturn in sales in the run up to Christmas but there is little reason to suggest a sustained increase in spending. The rising cost of living is going to force many families to tighten the purse strings and think about setting money aside to deal with the likelihood of increased or unexpected energy bills.
“With the economy stalling and talk of another possible lockdown due to rising Covid cases, the UK is facing an uncertain winter. It’s therefore no surprise that many households will want to take a more cautious approach to managing their money.”