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Paul Martin, UK Head of Retail at KPMG, said:
“September is traditionally a strong month for UK retailing as it’s back to school month. In addition this year, back to office purchases dominated sales as consumers shopped for new clothes and footwear before heading back to their workplace for the first time in 18 months.
Overall, the slowdown experienced over the last few months continued in September. The high street saw less than 1% growth with sales falling back across every category other than apparel and beauty. Online sales fell back by -2.0% compared to September 2020 - although online penetration rates remain significantly above pre-pandemic levels. Growth in food and drink sales was muted at 0.26% and grocers will be hoping that, with Halloween and bonfire night falling over weekends, consumers will be planning gatherings involving lots of food and drink to help boost sales in the coming weeks.
Fuel panic buying bought into sharp focus the impact supply chain bottlenecks and labour shortages can quickly have for consumers. The energy crisis is set to have further impact on inflation levels, putting pressure on household spending. Retailers will be hoping for some good news from the Chancellor in his Budget to help them manage rising costs.
As we run into the crucial Christmas shopping period, retailers continue to face staffing pressures and supply chain issues, with challenges getting products into the UK and getting goods into customers‘ hands. This may feed into limited availability of certain products and the spectre of price rises remains as retailers pull out all the stops for Christmas. Consumers are expected to start shopping earlier to bag those items already being reported as potentially out of stock by December. Successful retailers will have to work hard to ensure the right availability of the right product at the right price to satisfy the requirements of an ever more demanding customer.”
