Retail sales grow for fifth consecutive month

Retail sales volumes increased for the fifth consecutive month in September, this time by 1.5%, as the industry continued its recovery since the reopening of physical shops in June. September sales also represented a 5.5% growth compared to pre-pandemic levels in February.

Additionally, there was a rise of 17.4% in the three months to September compared to the previous three-month period.

Online again continued to perform strongly this month, reaching 27.5% of all retail sales. This compares to 20.1% reported in February, although eCommerce volumes have slightly tailed off since the reopening of non-essential shops. And a small month-on-month fall in online sales was recorded across all categories with the exception of department stores, in which a 6% growth was recorded. ONS said this was primarily due to online pre-ordering of a new range of gaming products.

The figures also showed that the proportion of online food sales in September was nearly double that of February.

Overall sales for household goods stores were 11% higher than in February, with feedback from these retailers suggesting this was largely driven by continued demand for home improvement items. Clothing continued to struggle however, with sales volumes 12.7% lower than in February.

Despite the encouraging figures, retail could be impacted by new Covid-19 restrictions to try and suppress rising Covid-19 cases in the build up to the crucial Christmas period. This month, the UK government has introduced a new three-tier system across England, while new nationwide lockdowns have been introduced in both Wales and Ireland, in which non-essential shops will be forced to close for two and six weeks, respectively.

Commenting on the figures, Ian Geddes, head of retail at Deloitte said: “Retail sales in September rebounded beyond pre-pandemic levels, as both month-on-month values and volumes recovered to 1.4% and 1.5%, respectively. September’s figures will be a welcome boost to retailers that continue to navigate through the ongoing Covid-19 pandemic. Despite a tumultuous six months, September’s sales also mark a year-on-year improvement, up 3.4% by value.”

He added: “Online trade, whilst slowing by -1.2% this month, remains 53% above year-on-year comparables, with web orders accounting for 27.5% of overall retail sales. As the nine-week countdown to Christmas begins, retailers will be keen to maintain online momentum and ensure distribution can continue to cope throughout the festive season. As a result, we may see earlier-than-ever discounting from retailers, enticing consumers to spread out their Christmas shopping and thereby stage demand over a longer, more manageable period. For some retailers, Black Friday will be an important supply chain ‘dress rehearsal’ for an increasingly online Christmas.”