Press release

20 Oct 2023 London, GB

EY comments on today’s ONS retail sales figures for September 2023

Silvia Rindone, EY UK&I Retail Lead comments

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Silvia Rindone, EY UK&I Retail Lead comments:

“Following a month of growth in August, retail sales volumes fell by 0.9% in September as consumers remained cautious. The unseasonably warm weather in September impacted non-food store sales which fell by 1.9% as consumers delayed refreshing their winter wardrobe. The increasingly unpredictable nature of the weather is something retailers will need to manage. There are currently high levels of unseasonal stock across the whole sector, which may lead to increased discounting in the lead up to Black Friday as retailers look to stimulate sluggish demand among shoppers. 

“Food sales volumes saw an unseasonal spike of 0.2%, as the warm spell prompted consumers to make the most of the good weather. 

“Online sales continued their downward trajectory in September as non-store retailing sales volumes fell by 2.2%. Retailers will be hoping to see an uplift in online spending in the run up to Christmas with Black Friday and Cyber Monday on the horizon. 

“A combination of suppressed and unpredictable demand and higher interest prices are starting to affect the retailers that didn’t use the pandemic period to realign their businesses. Those that continued not to invest in stores, propositions or customers are finding that shoppers are choosing to go elsewhere. 

“Looking further ahead, the EY ITEM Club Autumn Forecast predicts a mixed picture for consumer spending, which is expected to benefit from several supports over the coming months. Falling energy bills and easing food prices and inflation means overall inflation should decline to a predicted average of 7.4% this year, before falling to 2.9% in 2024. 

“As we enter the final ‘golden’ quarter of the year, pricing and inventory will be key priorities for retailers and brands. Last year, many consumers delayed spending as late as possible to help manage their finances leading to heavy discounting much earlier than normal. Retailers will need to consider what impact this may have on cash flow at a critical time of the year.”