UK retail sales fall 0.4% in September, steeper than expected

Sharper decline than forecast

The Guardian reports that Office for National Statistics data show Great Britain retail sales volumes fell 0.4% month on month in September 2026, steeper than the 0.1% fall economists had expected. The ONS said non-store retailing, predominantly online sales, dropped 2.2%, the largest percentage fall across the sector. Textile, clothing and footwear stores fell 0.9%, household goods retailers 0.5%, and supermarkets 0.4%.

Stripping out fuel, retail sales fell 0.7%, worse than the 0.1% fall forecast by the City. Department stores were the only sector apart from automotive fuel to record an increase, at 0.2%.

Fuel volumes rise despite record prices

Motor fuel volumes rose 2.2% month on month despite record pump prices, returning to levels last seen before the start of the conflict in the Middle East. In value terms, the 6.1% increase in fuel sales was the biggest month-on-month rise since March.

The monthly fall followed a stronger August, with the ONS revising its figure up from a 0.5% rise to 0.7%. That helped sales rise 0.7% over the three months to the end of September compared with the previous quarter.

Budget looms amid weak confidence

The data come before the chancellor, John Healey, announces his budget next week. The Guardian reports that consumer confidence in the UK has fallen at the fastest rate since the Covid pandemic. Capital Economics chief UK economist Paul Dales said the figures support the firm's view that real consumer spending and real GDP will grind to a halt in late 2026 and early 2027.