What: UK retail sales unexpectedly rose by 0.3% in September 2024, defying economists' predictions of a 0.3% fall and showing growth across various sectors.

Why it is important: The rise in retail sales, particularly in non-food sectors, indicates a possible shift in consumer behaviour and could signal cautious optimism for the upcoming festive season.

Official data shows that UK retail sales surprisingly increased by 0.3% in September 2024, contradicting economists' predictions of a 0.3% decline. This growth follows stronger gains in July and August, resulting in a 1.9% rise in Q3 sales, the joint largest increase since mid-2021. Non-food store sales volumes, including department, clothing, household, and other non-food stores, rose by 2.5% in September 2024, following a 0.6% increase in August. The main drivers of this growth were telecoms and computers, with the sector jumping by almost 35% in monthly terms. Clothing and footwear also contributed significantly, particularly during the key back-to-school month. This aligns with trends seen in major retailers like Tesco, which reported growth in its clothing and home sales . The rise in clothing sales may be attributed to the onset of autumnal weather, prompting consumers to update their wardrobes. Online sales also saw an uptick, with the value of total online spending rising by 1.3% month-on-month and 6.7% compared to September 2023. While fashion wasn't the star sector in online sales, it still showed growth. This data suggests a potential turning point in consumer behaviour and spending patterns, offering some optimism for the upcoming festive season, although it remains uncertain whether this trend will continue.

IADS Notes: The unexpected rise in UK retail sales aligns with positive trends seen in other major UK retailers. Tesco, for example, reported a 0.3% increase in clothing and home sales in the first half of the year . This growth in the clothing sector mirrors the boost in clothing and footwear sales noted in the official data, particularly during the back-to-school period. The overall retail landscape shows resilience, with non-food store sales volumes rising significantly. Tesco's plans to relaunch its F&F clothing range online further indicate a strategic focus on expanding digital offerings in response to changing consumer behaviours . These developments suggest a cautious optimism in the UK retail sector, despite ongoing economic challenges and concerns about potential tax rises.

UK retail sales in surprise upswing, fashion rises too