UK retail sales growth has experienced an all-time low for September, as ongoing Brexit uncertainty has a “material impact on the consumer psyche”, new research has shown.
UK retail sales decreased by 1.3% year on year in September, the latest British Retail Consortium (BRC) and KPMG Retail Sales Monitor has revealed, making it the worst September since records began in 1995. The decline was compared with an increase of 0.7% in September last year.
On a like-for-like basis, UK retail sales fell by 1.7% for the month, having dropped by 0.2% the preceding year. The decline was worse than the three and 12-month average declines of 0.8% and 0.4% respectively, making it the lowest 12-month average since August 2009.
Online sales of non-food products suffered a similar fate and grew just 0.7% in September - the worst growth ever recorded. This was against a growth of 5.4% in September 2018.
Similarly, non-food retail sales in the three months to September decreased by 1.7%. This is below the 12-month total average decrease of 1%, a new record low.
Paul Martin, UK head of retail at KPMG, said: ”Ongoing Brexit uncertainty is clearly having a material impact on the consumer psyche, with all but one non-food category being in decline in September. Consumers are choosing to focus on the essentials, with food one of the few categories delivering growth.
”We will likely experience increased promotional activity to clear surplus stock, which doesn’t bear well for retailers desperately trying to make up for lost ground after several difficult months.
“Retailers’ focus needs to be on cost and efficiency with only the leanest and most efficient operations coping with this extreme test of endurance. October, and the ramping up of Brexit plans, will clearly be a real test for the industry as a whole.”
Helen Dickinson, chief executive of the BRC, added: ”With the spectre of a no-deal weighing increasingly on consumer purchasing decisions, it is no surprise that sales growth has once again fallen into the red. Many consumers held off from non-essential purchases, or shopped around for the bigger discounts, while the new autumn clothing ranges suffered from the warmer September weather. The longer-term prospect continues to be bleak, with the 12-month average once again plumbing new depths at a mere 0.2%. Online non-food sales growth was the lowest on record, though still compared favourably to the decline in growth at physical stores.
“With four months of negative sales growth since March, the ongoing political gridlock surrounding Brexit is harming both consumers and retailers. Clarity is needed over our future trading relationship with our closest neighbours, and it is vitally important that Britain does not leave the EU without a deal.”