Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

UK retail sales fall in Sept despite panic buying of fuel

Economic IndicatorsOct 22, 2021 09:41
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Shoppers carry bags in London, Britain August 25, 2016. REUTERS/Neil Hall/File Photo 2/2

By David Milliken and Andy Bruce

LONDON (Reuters) -British retail sales unexpectedly fell for a fifth month in a row last month, despite a rush of motorists filling their cars with fuel, adding to signs that Britain's economic recovery is losing momentum.

Sales volumes dropped by 0.2% in September, official figures showed on Friday, as supply-chain problems led to gaps on store shelves. It marked the longest run of consecutive monthly falls since the series began in 1996 and bucked economists' expectations in a Reuters poll for a rise of 0.5%.

This softness adds to the conundrum faced by the Bank of England over whether to counter rapidly rising inflation by raising interest rates next month, or instead to wait for the economy to recover more of the ground it lost to the pandemic.

"Overall, the data support our view that the economic recovery stalled in September," said Bethany Beckett, UK economist at Capital Economics.

Retail sales rebounded strongly in the first part of the year as lockdown restrictions eased first for shops. But they have fallen steadily since a peak in April, partly as people spent more on holidays and eating out after social-distancing restrictions were relaxed more generally.

In the three months to September sales fell 3.9%, which the Office for National Statistics said would reduce broader economic growth in the third quarter by 0.2 percentage points.

Compared with before the pandemic, sales volumes are 4.2% higher, but they are 1.3% below where they were a year ago.

EMPTY SHELVES

Supply-chain bottlenecks led to gaps on some supermarket shelves, and many petrol stations ran out of fuel in late September and early October as shortages of tanker drivers led to queues of cars trying to fill up.

"Labour shortages across the supply chains, on farms, factories, warehouses and lorry drivers, all threaten to derail this recovery," the British Retail Consortium's chief executive, Helen Dickinson, warned after the data.

Petrol sales in September exceeded pre-pandemic levels for the first time, but there was a sharp drop in sales of household goods such as furniture and lighting, the ONS said.

Consumer price inflation is also accelerating sharply, due largely to higher energy prices, and the BoE predicts it will exceed 4% around the end of this year, double its target level.

A narrower measure of inflation used in the retail sales data rose to 3.7% in September, its highest since December 2011.

The prospect of higher prices -- as well as a more recent upsurge in COVID-19 cases -- has dampened consumers' mood. GfK reported earlier on Friday that its long-running sentiment survey showed the lowest morale since February, when Britain was still in lockdown.

Retailers also face a dilemma over how much they should pass on cost rises to consumers. Discount chain Poundland and online fashion retailer Boohoo both warned of lower profit margins in recent weeks.

The BRC said three out of five retailers expected prices to rise before Christmas.

Another online fashion retailer, ASOS (LON:ASOS), parted ways with its chief executive last week amid fears that supply chain pressures and consumers returning to pre-pandemic behaviour would reduce profits by 40% next year.

Friday's ONS data showed online spending remained strong overall at 28% of total retail sales in September, up from 20% before the pandemic. But it is far below its peak of 37% in January when high-street shops were closed during lockdown.

UK retail sales fall in Sept despite panic buying of fuel
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
David Hawley
David Hawley Oct 22, 2021 7:18
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So let's put interest rates up and drop retail sales figures some more
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email