Retail sales in the UK have held up despite a dip in confidence, driven by widespread discounts and a spike in entertainment spending after Oasis‘ tickets went on sale.
Consumer card spending increased 1.2 per cent year on year in September, after returning to growth in August, according to data from Barclaycard.
Discounting pushed spending on non-essentials up 2.7 per cent, although spending on non-essentials fell by 1.7 per cent.
Retail sales rose by 1.1 per cent, Barclays found, although the British Retail Consortium (BRC) estimated the figure higher, at two per cent.
Helen Dickinson, chief executive of the BRC, said that sales were boosted by the seasonal change and the start of the new academic year, as well as discounts.
“Ongoing concerns of consumers about the financial outlook kept demand low for big ticket items such as furniture and white goods,” she added.
Entertainment spend rose by 14.4 per cent to reach a 14-month high – the highest uplift since July 2023 when the Eras Tour presale took place – helped by Oasis’s reunion tour sales, which resulted in a 35.8 per cent year on year boost for live concerts and shows, according to Barclaycard.
Karen Johnson, Head of Retail at Barclays, said: “Retail’s recovery emerged as a bright spot in September, despite there being colder weather and darker evenings on the horizon.
“While shoppers’ remain cost-conscious, it’s clear they’re responsive to retailers’ promotional activity,” she added. “Discerning shoppers are also finding room for treats and little luxuries within their budget, demonstrating that consumers are prioritising spending on things that bring them joy.
Despite encouraging retail figures, the collapse in consumer confidence for September has raised alarm bells across the UK economy.
According to GfK’s consumer confidence measure, sentiment plummeted to -20 from -13 in August, the lowest level since March.
Fewer consumers felt positive about their own financial position in September compared to August, and many reported being less likely to make large purchases.
The decline in confidence reflects ongoing economic uncertainty, including rising unemployment and persistent inflation, particularly in service sectors.
The Bank of England’s more cautious stance compared to other central banks, and the expectation that interest rates will remain high, is also weighing on consumer sentiment.
Shoppers – and shops – gear up for Christmas
As Christmas products start to hit the shelves, cost-conscious Brits – just under a fifth of those surveyed – have already started saving money for Christmas.
Sarah Bradbury, chief executive of IGD, said: “With the golden quarter just beginning, retailers have been implementing seasonal ranging earlier than ever, determined to make the most of the coming key trading period.”
“While many are anticipating a costly Christmas, there are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending,” Johnson said.
Dickinson said: “The coming months are crucial for the economy as retailers enter the “Golden Quarter”. But in the face of weak consumer confidence and the continued high burden of business rates, retailers’ capacity for further investment is limited.”
Yesterday, 71 retail chief executives argued the government should “level the playing field” by introducing a ‘retail rates corrector’, which would see rates paid on retail properties fall by 20 per cent, in a letter coordinated by the BRC.