Fuel crisis and bad weather hit UK retail rebound in September

·3 min read
 People on the streets, shelter themselves from rain underneath umbrellas as Storm Ellen brings heavy rainfall with gusty winds in north London.
According to the Met Office, warmer weather with highs of 24 degrees Celsius is forecasted for the rest of the week. (Photo by Dinendra Haria / SOPA Images/Sipa USA)
Poor weather was one of the reasons behind lower consumer footfall in September. Photo: Dinendra Haria/SOPA Images/Sipa USA)

A perfect storm of the supply chain crisis, staffing issues, rocketing fuel prices and poor weather have been chalked up as reasons for a disappointing retail footfall in September.

Covering the period of five weeks between the 29 August and 2 October, the British Retail Consortium's (BRC) monthly retail sales monitor found that on a total basis, sales increased by 0.6% in September, against a growth of 5.6% in September 2020. 

This was below the three-month average growth of 3.1% and the 12-month average growth of 9.8%.

On a two-year basis, total retail sales grew 5.8% during September compared with the same month in 2019.

UK retail sales decreased 0.6% on a like-for-like basis from September 2020, when they had increased 6.1%. This was below both the three-month average growth of 1.7% and the 12-month average growth of 10.2%.

Read more: Supply issues to hit Christmas retail footfall but drive up Black Friday shopping

“September saw the slowest retail sales growth since January, when the UK was in lockdown. There are signs that consumer confidence is being hit as the fuel shortages, combined with wetter weather, had an impact in the second half of the month," said Helen Dickinson, CEO of the BRC.

Chart: BRC
Chart: BRC

Dickinson noted that furniture and homeware saw a bigger hit, while in-store purchases (as opposed to online) regained lost ground alongside footwear as workers return to offices. 

"While online sales were down on the previous year, they remain significantly above pre-pandemic levels, reinforcing the permanent changes in consumer behaviour."

Staffing pressures and supply chain issues were also blamed for the hit to consumer spend in September. 

"This may feed into limited availability of certain products and the spectre of price rises remains as retailers pull out all the strings for Christmas" said Paul Martin, UK head of retail at KPMG. 

"Consumers are expected to start shopping earlier to bag those items already being reported as potentially out of stock by December and successful retailers will have to work very hard to ensure the right availability of the right product at the right price to satisfy the requirements of an ever more demanding customer.”

Footfall across all UK retail destinations is forecast to be down during the “crucial” six-week Christmas trading period – but up during the Black Friday sales.

Read more: Bank of England warns markets could face sharp correction

Retail insight provider Springboard projected earlier this week that consumers were likely to begin Christmas shopping at the start of November so they can secure their desired gifts.

Springboard has predicted that between 21 November and 4 January, retail footfall will average 17% lower than 2019, before the pandemic hit. This continues from the current trajectory seen in September 2021, with footfall down 17.4%.

The drop is expected to be driven by high streets and shopping centres.

Meanwhile footfall in retail parks has been resilient throughout the pandemic and will average 5.5% higher than 2019 over the six weeks.

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