The ‘back-to-school’ effect failed to deliver for retailers in September as consumer confidence took a knock in the face of heightened Brexit uncertainty.
Figures from the British Retail Consortium (BRC) and KPMG sales monitor showed that retail sales fell by 0.2% on a like-for-like basis compared to the same month in 2017.
This compares to an increase of 0.2% in August, when warm weather fuelled-grocery spending boosted the sector.
Total sales also dipped, falling from 1.3% in August to 0.7%.
Growth in grocery spending ‘retreated’ in September, the BRC said, while non-food sales were hammered as ‘back-to-school’ sales failed to deliver.
Jon Woolven, of IGD, said: ‘Shopper confidence has followed a downward path with those expecting to be financially better off over the year ahead dipping from 26% in July to 22% in September.
‘Brexit-related uncertainty probably plays a part in this, so retailers will be hoping for a clear resolution ahead of the Christmas shopping season.’
Businesses are sweating over the ability of the government to deliver on their promise of a Brexit that contains ‘all of the benefits’ of EU membership while simultaneously exiting the bloc.
Major concerns are also weighing on ordinary Britons who are expected to be hit with disruptions to food, medicine, power and fuel supplies in the event of a no-deal Brexit, as well as soaring inflation.
All of this is giving firms a headache before the critical Christmas trading period.
Paul Martin, UK head of retail at KPMG, said: ‘The final golden quarter of the year marks the ultimate test for many players, but retailers must also successfully navigate: the upcoming government Budget, Black Friday, Christmas, and of course Brexit.’
A survey by Barclaycard found nearly half of consumers say they are planning to spend less on Christmas than they did last year.
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