In September, the growth of food sales exhibited a noticeable slowdown, attributed to prolonged wet weather conditions, as per the BRC-KPMG retail sales monitor.
- Food sales rose by 3.1% year-on-year over the past three months, considerably lower than September 2023’s 7.4% growth.
- The 12-month average growth stands at 4.4%, indicating September’s performance fell short of expectations.
- Despite overall UK retail sales reaching a six-month peak, non-food sectors outperformed forecasts, highlighting the disparity in sector performances.
- Concerns about rising costs and economic policies persist, impacting consumer confidence and market stability.
In the month of September, food sales experienced a noticeable deceleration due to extended periods of wet weather, according to the latest data from the British Retail Consortium (BRC)-KPMG retail sales monitor. While there was a year-on-year increase of 3.1% over the past three months, this figure is sharply lower than the impressive 7.4% growth seen in the corresponding period of the previous year. This trend also falls short of the 12-month average growth of 4.4%, signalling a significant slowdown in the market’s momentum.
Sarah Bradbury, CEO of IGD, commented on the situation, highlighting that the onset of autumn dampened growth in the grocery retail market despite year-on-year improvements. She attributed this slowdown not only to adverse weather conditions but also to prevailing cautionary economic sentiments communicated by the government. The wet weather and economic warnings seemed to have cast a shadow over consumer spending patterns, Bradbury noted.
The BRC report revealed that, paradoxically, UK overall retail sales observed their strongest growth in six months during the same period, primarily driven by better-than-expected performances in the non-food sectors. The retail sales increased by 2% year-on-year in September, surpassing the previous year’s growth of 2.7% for the same duration and exceeding the three-month average growth of 1.2%. This divergence points to the resilience and adaptability of the non-food sectors amidst challenging circumstances.
Despite maintaining a stable level of shopper confidence last month, future prospects remain clouded by potential downturns linked to the anticipated Autumn Budget and increasing energy prices. Cost-of-living concerns continue to loom large in the consumer psyche, underscoring the need for strategic measures to sustain market confidence.
BRC’s chief executive, Helen Dickinson, further emphasised that proactive fiscal strategies by the Chancellor could play a pivotal role in revitalising investment and economic growth nationwide. She suggested the introduction of a 20% Retail Rates Corrector as a means to bolster market activity and safeguard consumer interests during these unpredictable economic times.
The data underscores a challenging period for the food retail sector, demanding robust strategies to counteract environmental and economic challenges.
