The latest BRC-KPMG retail sales monitor reports a slowdown in food sales growth for September.
- Food sales rose by 3.1% year-on-year in September, a marked decrease compared to a 7.4% growth in the same month last year.
- This growth is also below the 12-month average of 4.4%, highlighting a downward trend.
- Economic caution and wet weather are cited as primary factors for this deceleration.
- Despite overall robust retail sales, non-food items outperformed expectations, contrasting with food sales.
The recent BRC-KPMG retail sales monitor has revealed a deceleration in food sales growth for the month of September. While food sales increased by 3.1% compared to the previous year, this represents a notable decline from the 7.4% growth observed in September 2023. Additionally, this growth figure falls short of the 12-month average growth rate of 4.4%, reflecting a slowdown in sales momentum as the new season begins.
Sarah Bradbury, CEO of IGD, noted the impact of both the wet weather and governmental economic updates on consumer confidence, which has contributed to the sluggish growth in grocery retail. According to her, “Growth in the grocery retail market slackened with the arrival of autumn,” further indicating that while sales remained positive year-on-year, there was a significant drop in the pace of increase compared to the previous month.
Despite this slowdown in food sales, overall retail sales in the UK saw their strongest growth in six months. According to Helen Dickinson, Chief Executive of the BRC, the non-food sector performed better than anticipated, contributing to a year-on-year increase of 2%. This figure surpassed the three-month average growth of 1.2%, showcasing resilience in other areas of retail despite the challenges faced by the food sector.
Looking ahead, experts predict that shopper confidence may be adversely affected by anticipated challenges in the economy, including a difficult Autumn Budget and rising energy prices. Bradbury remarked that “news of a difficult Autumn Budget and rising energy prices will likely cause a downturn in confidence with cost-of-living concerns remaining front and centre in shoppers’ minds.” Consequently, the retail sector is advised to brace for potential shifts in consumer spending patterns as these economic factors continue to unfold.
In addressing these concerns, Helen Dickinson suggested that decisive measures from the government, such as implementing a 20% Retail Rates Corrector, could stimulate investment and economic growth across the country. Such initiatives could alleviate some of the pressure on the retail market and potentially revitalise consumer confidence and spending.
The combination of adverse weather and economic uncertainties has clearly impacted food sales growth, contrasting with broader retail strength.
