Retail sales monitor the quantity bought (volume) and amount spent (value) by shoppers in the UK.

For September, both figures fell 1.4%, according to the Office for National Statistics (ONS).

These were impacted by the bank holiday for the Queen’s State Funeral, as well as shoppers cutting back on transactions as prices continue to rise.

The ONS said retail sales volumes are 1.3% below the pre-Covid February 2020 levels, while in the three months to September, the figure fell 2% on the previous quarter.

“This continues the downward trend seen since summer 2021,” the ONS noted.

It said food store sales volumes fell 1.8% in the month, which leaves them 3.2% below pre-pandemic levels.

Meanwhile, non-food stores sales – such as department, furniture and clothing stores – fell 0.6% and are 2.7% below February 2020 levels.

Elsewhere, even online retailers noticed a fall in volumes (3%) in September, but they were 18% above their pre-Covid levels.

Overall, the proportion of retail sales taking place online was 26.4% in September 2022. “This has remained at a broadly consistent level since May 2022,” the ONS said

And turning to fuel sales, this category fell 1.3% in the month, taking them to 10.2% below the pre-pandemic level.

‘Pound just isn’t stretching as far as it used to’

Danni Hewson, AJ Bell financial analyst, said: “A pound just isn’t stretching as far as it used to. Cutbacks are happening across the whole retail landscape and September figures fell more than had been expected. The lack of consumer confidence ahead of what is a crucial period for the retail sector is making many shop owners incredibly concerned.

“The effect of rising prices is writ large when you compare September sales with those experienced in February 2020. Sales volumes are down 1.3% but values have shot up by 12% – the numbers are stark but the impact on real lives is starker still.

“After Covid, we were asked to spend our way out of recession, that’s simply not going to be an option during the new recession the country is stumbling towards.”

‘More pain lies ahead’

 Alice Haine, personal finance analyst at Bestinvest, the DIY investment platform and coaching service, said more pain lies ahead for both shoppers and the retail sector with the cost of borrowing set to jump again when the Bank of England increases interest rates early next month. Analysts are expecting a rise of at least 100 basis points, taking the base rate to 3.25%.

“With expectations the base rate will peak at 5% next year, it’s no surprise that consumer sentiment is still on the floor, with the GfK’s consumer confidence index – considered a bellwether of future household spending – remaining near a 50-year low as the country’s bleak economic prospects and political turmoil continue to take their toll.

“With financial and political events changing at an alarming pace, ordinary people struggling to absorb it all must not only contend with high inflation but also soaring mortgage rates, making the strain on their personal finances and fears over the state of the economy very real as the country heads into the colder months,” she said.

Haine added: “With inflation expected to rise further from here and the economic uncertainty set to continue as the government shops for a new leader, this will only exacerbate the squeeze on households’ real incomes, causing retail sales to struggle even more in the run-up to Christmas.”