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Shoppers holding back ahead of Christmas as retail sales drop

Shoppers holding back ahead of Christmas as retail sales drop
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Retail sales dropped by 0.9% in September, as shoppers look to tighten their belts ahead of Christmas, retail statistics reveal.

Despite a rise during August, UK retailers saw sales for non-food items dip by 1.9% – a sign that households are still watching their pennies during the cost-of-living crisis, according to the Office for National Statistics.

The hottest September since records began is also believed to have contributed to the fall, as retailers suggested the need for a fresh winter wardrobe was not a priority – causing a 1.6% drop in sales for clothes stores.

Perhaps worryingly for shops across the country, the drop in September sales continued a trend of shoppers holding back. In the three months leading up to September, there were 0.8% fewer sales than in the three previous months.

Food sales also tempered in volume, with just a 0.2% rise in September, compared to an increase of 1.4% in August.

With Christmas on the horizon, supermarkets, clothes shops, and every other retailer will be hoping the nation is saving up for a festive splurge in the winter months. But after a separate study found shoppers are planning to spend less this Christmas, there are no guarantees that will happen.

Retailers ‘keeping fingers crossed’ for festive spending

Danni Hewson, head of financial analysis at AJ Bell, said: “High streets already have their Christmas lights in place and though they’re not twinkling yet every retailer will be fully focused on the festive season.  he next three months are the most important of the year for the sector, the time when people splash out on gifts for friends and family, so the fact that consumers tightened their belts in September will undoubtedly be cause for concern.

“Inflation has been falling but everyone is acutely aware that it doesn’t mean prices are falling too, and many people might have had chunky pay increases but that doesn’t mean wallets are suddenly bulging. Households are acutely aware of every bill, every penny, and every degree the temperature falls. People are still spending but they’re thinking about their purchases in relation to the bigger picture.

She added: “Yes, people are still spending but they’re being savvy and with more sites like Vinted creating opportunities to stretch budgets by choosing new to us rather than brand new, there will be added pressure on retailers to keep prices keen and make the most of promotion events like Black Friday.

“It is an improving picture and retailers will be keeping their fingers crossed that the September dip has come about because shoppers are keeping their powder dry, saving up in order to splurge later.”