In the build up to the crucial Christmas trading period, retailers are looking to break records, however, this month’s ONS retail figures are not the records they were hoping for. September’s UK retail stats mark an 18-month low point; retail volumes fell by 6.9% YoY to their lowest level in over 18 months, driven by rising inflation, which has steadily risen from 0.7% to 10.1% over the same 18-month period. Gas prices, similarly, have risen consistently over the last 24 months, with resulting pressure on disposable income contributing to an 18-month decline in consumer confidence. This, coupled with unemployment, which in September stood at 3.6%, the second lowest rate since 1974, puts retailers into an untenable situation: rising costs and rising prices against a consumer base fatigued by sustained pressures on their cost of living and levels of optimism.

Elsewhere, September saw non-food sales volumes fall by 0.6% MoM, with only clothing stores sales volumes seeing a minimal MoM increase of 0.1%, likely driven by the 'back to school' season. More generally, the beleaguered high street will likely breathe a sigh of relief that our love affair with online shopping during the pandemic appears at the very least to have lost a little of its passion. Online shopping fell by 8.2% YoY in September, and the slight (1.2%) increase over August is unlikely to cause significant concern to bricks and mortar retailers in the build up to Christmas.

And, as swathes of us continue to work from home, the ‘home economy’ is booming. We’re still spending on selected online bargains, expensive gas and electricity, and, thanks to its new pricing model, even more hours in front of Netflix. This increased time at home, however, is seeing shoppers invest into energy- (and thus price-) efficient appliances and warmer clothing and textiles to keep warm this winter - in a boost both to the environment and our monthly bills. As such, UK retailers will have to use every trick in the book this winter to lure us from our homes. We’re even seeing premium retailers putting price front and centre, with the likes of M&S, Sainsbury’s, and Waitrose announcing cuts and filling stores with highly-visible low prices on selected items. Only time will tell whether consumer confidence can rebound enough this winter to extend the much needed life line of bumper sales to a retail industry still struggling with legacy Covid costs and a backdrop of exceptionally hostile trading conditions.