September saw unseasonably warm weather in the UK, with the Met Office reporting that the month was the joint-warmest September on record. The ONS says many consumers delayed purchasing new seasonal items, such as warm coats and boots, as a result.
The ONS explains that continuing cost pressures also contributed to the decline in sales volume, as non-food sales overall declined 1.9%. Sales in department stores also fell 1.6%.
The figures come after ONS figures in August 2023 showed retail sales volumes grew 0.4%, up from a revised fall of 1.1% in July.
EY’s UK and Ireland retail lead Silvia Rindone says the figures demonstrate that fashion retailers will need to learn to adapt to increasingly unpredictable weather.
“The unseasonably warm weather in September impacted non-food store sales which fell by 1.9% as consumers delayed refreshing their winter wardrobe,” Rindone explains.
“The increasingly unpredictable nature of the weather is something retailers will need to manage. There are currently high levels of unseasonal stock across the whole sector, which may lead to increased discounting in the lead-up to Black Friday as retailers look to stimulate sluggish demand among shoppers.”
Rindone adds: “A combination of suppressed and unpredictable demand and higher interest prices are starting to affect the retailers that didn’t use the pandemic period to realign their businesses. Those that continued not to invest in stores, propositions, or customers are finding that shoppers are choosing to go elsewhere.”
Non-store retailing sales, which the ONS says is mainly online stores, fell by 2.2% as the cost of living and warm weather also dampened sales.
Online spending values fell by 1.3% between August and September 2023. The ONS points out this was due to declining clothing, footwear and other non-food sales.
The month-on-month fall in the value of online retail was larger than the monthly fall in the value of total retail, as the proportion of online sales fell from 27% in August 2023 to 26.7% in September 2023.
However, the ONS also flagged that despite the decline, online sales in September 2023 were still 15.2% above pre-pandemic levels in February 2020. ONS figures in August 2023 showed the average weekly online clothing sales hit a record high of £1.7bn ($2.17bn) in the first half of 2023.
Rindone says: “Retailers will be hoping to see an uplift in online spending in the run up to Christmas with Black Friday and Cyber Monday on the horizon.”
Clive Black, research analyst at ShoreCap says: “We have been anticipating a slow autumn 2023 retail momentum as households save up and prepare for Christmas 2023; many supermarkets have pitched up with early merchandise of ranges to help spread the spending load.”
Black adds that the considerable rain in October so far may help sales of boots and outerwear, although he believes that the UK may be past “peak-Halloween,” so any connected sales here are unlikely to be significant.
Looking ahead, EY’s Rindone says: “As we enter the final ‘golden’ quarter of the year, pricing and inventory will be key priorities for retailers and brands. Last year, many consumers delayed spending as late as possible to help manage their finances leading to heavy discounting much earlier than normal. Retailers will need to consider what impact this may have on cash flow at a critical time of the year.”
