UK Retail Sales Slow in September, May Weigh on Pound Ahead of Rachel Reeves’ Budget

• Total retail sales up 2.3% year-on-year; like-for-like sales at 2.0% in September (British Retail Consortium).

• Non-food categories fell (clothing and household goods down ~0.7%); shoppers trading down and buying smaller quantities.

• Shop price inflation rose to 1.4% in September; retailers cite higher import and energy costs (BRC) and targeted promotions (KPMG).

UK retail sales slowdown in September: consumers curbed spending ahead of the November budget. COINOTAG analysis of BRC and KPMG data — read insights now.

What is causing the UK retail sales slowdown?

UK retail sales slowdown in September stems from consumers prioritizing essentials amid inflation and uncertainty over fiscal policy. Official British Retail Consortium data show total retail sales rose 2.3% year-on-year while like-for-like sales fell to 2.0%, reflecting weaker non-food demand and selective spending by households.

How will the November budget affect retailers?

Uncertainty around the Chancellor’s November budget is a central factor in the slowdown. Retailers and consumers are pausing discretionary purchases while awaiting potential tax and business rate changes. The British Retail Consortium has warned that introducing a new business rates band for large stores could accelerate closures and job losses. The Federation of Small Businesses has urged the Treasury to freeze or cut business rates to prevent further strain on small high-street traders.

Helen Dickinson, Chief Executive of the British Retail Consortium, noted: “The uncertainty is clearly having an impact on household activity.” Retailers are preparing contingency plans while relying more on promotions and tight product ranges to secure sales in the crucial ‘‘golden quarter’’ ahead of Christmas.

Frequently Asked Questions

How much did UK retail sales grow in September year-on-year?

Official BRC figures show total retail sales increased 2.3% in September year-on-year. Like-for-like sales (stores open at least a year) were weaker at 2.0%, down from 2.9% the prior month, signalling slower momentum despite positive headline growth.

Why are shoppers delaying purchases and trading down?

Shoppers are delaying non-essential purchases due to a mix of higher prices, tax uncertainty from an impending budget, and unseasonably warm weather reducing demand for autumn clothing. KPMG’s retail tracker reports more trading down to cheaper brands and smaller pack sizes as consumers protect household budgets.

Key Takeaways

• Headline growth masks slower momentum: Total sales rose 2.3% year-on-year, but like-for-like growth eased to 2.0%, highlighting subdued in-store performance.
• Discretionary categories under pressure: Non-food sales, including clothing and household goods, contracted and were particularly affected by weather and selective spending.
• Policy risk matters: Pending November budget decisions and potential changes to business rates could materially affect margins, store footprints, and small business viability.

Conclusion

COINOTAG analysis of British Retail Consortium and KPMG reporting shows a clear UK retail sales slowdown in September driven by inflation, fiscal uncertainty and softer discretionary demand. Retailers are gearing up for the important holiday trading period with targeted promotions and staffing increases, but policy decisions in the November budget will be pivotal for sector resilience. Published: 2025-10-14 | Updated: 2025-10-14. Author: COINOTAG.