September witnessed a notable uptick in retail sales, thanks to heavy discounting and the back-to-school shopping period, marking the highest growth rate in six months. Nevertheless, shoppers remain hesitant about making larger purchases amidst ongoing economic uncertainties.

According to the latest data from the British Retail Consortium-KPMG Retail Sales Monitor, UK retail sales rose by 2% during the five-week period ending September 28, surpassing the 12-month average increase of 1.1%.

Concerns regarding the financial outlook have led to dwindling demand for significant purchases, including furniture and large appliances, as noted in the report.

In the food sector, sales showed a year-on-year increase of 3.1% over the three months leading up to September. This growth, however, is lower than the 7.4% increase observed last September and beneath the 12-month average growth of 4.4%.

Non-food sales experienced a slight downturn, decreasing by 0.3% compared to the previous year, although this decline is an improvement from the 1.2% drop recorded last September.

Helen Dickinson, chief executive of the retail consortium, commented, “As autumn took hold in the UK, shoppers were eager to refresh their wardrobes with new coats, boots, and knitwear. The beginning of the month also saw a last-minute surge in purchases of computers and clothing ahead of the new academic year.”

She further stated, “The next few months are pivotal for the economy as retailers approach the ‘golden quarter.’ However, due to low consumer confidence and the persistent heavy burden of business rates, retailers’ ability to invest further is constrained.”

Linda Ellett, KPMG’s UK head of consumer, retail, and leisure markets, remarked, “Retailers experienced welcome but modest sales growth in September, with household budgets appearing somewhat less strained for certain parents compared to the previous year.”

She added, “With rising energy prices in play, attention now shifts to the upcoming budget and its implications for household discretionary spending in the year’s final quarter.”

Independent figures from Barclays indicated a 1.2% year-on-year increase in consumer card spending during September, with non-essential spending reaching its highest growth rate of 2.7% this year, attributed to significant discounts in retail.

Entertainment spending hit a 14-month high, marking the largest increase since July 2023 when Taylor Swift’s Eras Tour ticket sales surged, buoyed by the sales from Oasis’s reunion tour, which contributed to a 35% year-on-year increase in live concert and show attendance.

Karen Johnson, head of retail at Barclays, noted, “Despite the onset of colder weather and shorter days, retail’s recovery emerged as a positive development in September. While consumers are still being careful with their spending, it is evident they are responding positively to promotional efforts from retailers. Shoppers are also making room for treats and small luxuries, indicating a desire to spend on items that enhance their enjoyment.”

Barclays reported that spending on clothing surged by 23.6% month-on-month and 4.5% year-on-year, the highest rise since July 2022, while department store sales increased by 5.5%, the most significant gain since August 2023.

Conversely, spending on essential goods saw its most substantial decline since April 2020, down by 1.7%. Grocery spending fell by 0.8% for the first time since June, as consumers sought ways to reduce expenses, leading to a 1.1% decrease in sales at supermarkets. Additionally, growth in food and drink specialist stores slowed to 2.7%, a drop from the 5.1% increase observed in August.