UK retail sales fall 0.4% in September amid declining consumer confidence

UK retail sales volumes fell by 0.4% in September, a sharper decline than the 0.1% drop anticipated by economists. The contraction was driven largely by a 0.9% decrease in clothing and footwear sales, as unseasonably warm weather reduced demand for autumn and winter collections. Supermarket sales also saw a slight decline of 0.4% following growth in previous months.

This downturn coincides with an “extraordinary collapse” in consumer confidence. GfK data shows the consumer confidence index plunged 11 points to -24 in October, marking its steepest monthly decline since the early stages of the pandemic and the 2016 Brexit vote. Consumers reported worsening personal financial situations and reduced willingness to make major purchases.

Economic pressures include rising inflation, which reached 3.5%, and increased fuel costs linked to geopolitical tensions in the Middle East. These factors come as retailers look toward the upcoming Budget from Chancellor John Healey, with industry leaders seeking relief from rising business rates and employer National Insurance contributions. Despite the monthly dip, quarterly data showed a 0.7% increase in sales volumes for the third quarter of 2026.