UK retail sales rose unexpectedly in September, defying analyst predictions of a contraction, as consumers increased spending on technology despite impending tax rises and economic uncertainties.
According to the Office for National Statistics (ONS), retail transactions grew by 0.3% in September, building on a strong 1% increase in August. Analysts had forecast a 0.4% decline for the month.
While technology equipment saw strong sales, supermarket spending faltered, with consumers cutting back on luxury food items amidst concerns about rising costs. Retail sales are still 0.2% lower than pre-pandemic levels, highlighting the ongoing challenges faced by the sector.
Over the three months to September, sales increased by 1.9%, the joint largest quarterly rise since July 2021. Hannah Finselbach, a senior statistician at the ONS, noted: “Tech stores reported a notable rise in sales, which offset weaker performance in supermarkets due to bad weather and cautious consumer spending on luxury items.”
Consumer Confidence and Spending Patterns
Erin Brookes, European retail and consumer lead at Alvarez & Marsal, attributed the growth to factors such as record rainfall and early winter chills, which boosted demand for warm clothing. “While consumers remain cost-conscious, budgets are somewhat less strained than they were a year ago,” Brookes noted, though she warned that uncertainty ahead of the autumn budget could impact consumer confidence.
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