Retail sales volumes fall 0.2% in September, ONS reports

Retail sales volumes fell by 0.2% in September 2021, following an upwardly-revised 0.6% fall in August; accoridng to the latest figures from the Office for National Statistics (ONS). Despite the fall in September, volumes were 4.2% higher than their pre-coronavirus (COVID-19) pandemic February 2020 levels.

Non-food stores reported a fall of 1.4% in sales volumes in September 2021, because of falls in household goods stores (negative 9.3%), such as furniture and lighting stores, and other non-food stores (negative 1.7%) such as sports equipment stores.

Automotive fuel sales volumes rose by 2.9% in September 2021 as demand towards the end of September increased sales; volumes were 1.8% above their pre-pandemic February 2020 levels.

Food store sales volumes rose by 0.6% in September 2021 and were 3.9% above pre-coronavirus pandemic levels in February 2020.

Despite relaxation of COVID-19 restrictions in summer 2021, in-store retail sales remain subdued; the proportion of retail sales online rose to 28.1% in September 2021 from 27.9% in August, substantially higher than the 19.7% in February 2020 before the pandemic.

Sachin Jangam, partner for retail, Infosys Consulting, said: “It’s no real surprise to see retail sales fell for the fifth month running in September, by 0.2% according to ONS figures – but it’s encouraging that this is a continued reduced drop from July’s 2.8%, and the 0.6% drop in August. Non-food stores were hit by a 1.4% fall in sales, with many consumers still choosing to shop online. Meanwhile, food and fuel sales saw a boost. It can’t be ignored that the difficulties with fuel supply last month played a part, as ‘panic buying’ drove consumers to stock up.

“To bring consumers back to non-essential shopping, retailers need to invest in creating personalised, valuable experiences. This goes further than just offering the products customers need. It’s about providing unique experiences, whether that be rapid same-day delivery or experiential destination stores. To achieve this, retailers need to invest in understanding their customers, by collecting and analysing consumer data through effective digital marketing engagement and loyalty programmes. We are seeing some retailers focus heavily on enhanced physical convenience, such as Tesco’s and Amazon’s new ‘just walk out’ stores. Other retailers would do well to follow suit, bringing the speed and ease of ecommerce into the physical shopping experience, making it even easier for consumers to keep coming back to physical stores.

“Faced with shortages, supply chain delays, and unpredictable weather, forecasting algorithms also need revision. Traditional forecasting techniques, based on historical data and trends may no longer work effectively. Retailers need to show agility in the buying process, especially as we enter the Christmas trading period. Retailers should take the opportunity to prepare for this period, ensuring they have the right stock at the ready. This preparedness will be difficult to achieve but can be helped along by analysis of consumer shopping patterns and behaviours, and even predictive AI and ML tools to forecast short-term demand.”

Jace Tyrrell, chief executive at New West End Company, which represents 600 businesses on Oxford Street, Regent Street, Bond Street and in Mayfair, commented: “After such a challenging year, we are disheartened to see that retail sales are down 0.2% from last month, indicating that a gradual return to normality is still far from reach for retailers across the country. We hope a busy upcoming Christmas period will offer some confidence to West End businesses as they gradually recover sales.

“If retail sales are to grow, we require more support. We rely heavily on overseas visitors to spend in the West End and maintain appeal for global brands. But we are currently at a major disadvantage, compared to other destinations such as Paris, to entice overseas visitors back to the Capital. We are therefore calling on the Government to explore a simplified visa process and review the restrictive Sunday Trading hours policy. Now is the time to give retailers and visitors alike more freedom as this announcement is clear evidence that we are still far behind where we need to be.”