Warm weather weakened clothing demand and supermarket sales slipped, although retail sales volumes rose 0.7% in the third quarter as retailers entered the crucial Christmas trading period.
Retail sales volumes in Great Britain fell by 0.4% in September 2026 as unseasonably warm weather weakened demand for autumn clothing and supermarket sales declined after two months of growth.
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However, the latest Office for National Statistics (ONS) report, released on 23 October, showed growth over the wider period. Sales volumes rose by 0.7% in the third quarter compared with the previous three months and were 1.5% higher than a year earlier.
September’s decline followed a revised 0.7% increase in August, up from the previously estimated 0.5%. Sales volumes remained 0.8% above September 2025.
The figures offer a mixed picture for retailers entering the final quarter, which includes Black Friday and Christmas trading. The ONS cautioned that monthly movements can be volatile and should be considered alongside the three-month trend.
Warm weather hits clothing demand
Online clothing retailers told the ONS that autumn and winter ranges launched in September performed poorly because of the unseasonably warm weather.
The bulletin cited Met Office figures showing that September 2026 was the joint-fourth warmest September on record.
Non-store retail sales volumes fell following strong trading in August. This category consists mainly of online retailers but also includes businesses without conventional shops, such as market stalls.
Supermarket sales volumes also declined, falling slightly below June levels after increases in July and August. The ONS said lower-than-usual clothing sales partly contributed to September’s overall retail sales decline.
Non-food store sales volumes fell by 0.4% month on month. Clothing and footwear retailers, alongside sports equipment stores, reported weaker sales, which they attributed to lower footfall and customers cutting back.
Household goods stores also recorded a decline, largely because of weaker hardware sales.
Automotive fuel sales bucked the monthly trend, with volumes rising despite further increases in fuel prices.
Fuel and food support quarterly growth
Fuel and food stores helped drive the increase in retail sales volumes over the third quarter.
Fuel sales continued to recover from a weaker second quarter, when retailers reported that higher prices in April had prompted motorists to make fewer journeys and delay filling their tanks.
Sales volumes subsequently recovered, with fuel sales in each month of the third quarter exceeding those in every month of the second quarter.
Food store volumes also increased over the quarter, supported by supermarket growth in July and August.
Alcohol and beverage retailers reported strong sales volumes between June and September. They attributed the performance to promotions, warm weather and the football World Cup.
Non-store retailers also recorded quarterly growth following weaker sales in April.
The figures show that September’s decline came after a period of growth, rather than a sustained contraction in retail sales.
Online sales ease after August rise
The value of online retail sales fell by 0.4% in September, following a 3% increase in August. However, online sales values remained 6.8% higher than a year earlier.
Across the third quarter, online sales values edged down by 0.1% compared with the previous quarter but rose by 7.4% year on year.
Online purchases accounted for 28.8% of total retail spending in September, down from 28.9% in August.
Total retail spending, combining online and in-store sales, rose by 0.3% over the month.
These figures measure sales values rather than the quantity of goods bought. The headline retail sales volume figures, by contrast, measure the quantity purchased, adjusting for price changes.
Shoppers need a reason to spend
Nicholas Found, Head of Commercial Content at consultancy Retail Economics, said September had marked “a clear softening in retail momentum”.
Alongside the weather, he pointed to rising fuel and household costs as pressures on discretionary spending. The approaching Black Friday period and UK Budget also gave shoppers reasons to delay purchases, he said.
“Demand hasn’t disappeared, but consumers increasingly need a compelling reason to spend,” Found said.
He said health and beauty continued to benefit from smaller indulgences, while product innovation helped generate demand in other parts of the market.
Grocery spending also reflected consumers’ focus on value.
“Grocery spending shows shoppers remain intensely value-conscious, with promotions doing more of the heavy lifting,” he said.
For retailers, this highlights the importance of competitive pricing, relevant product ranges and promotions as households manage their budgets.
Overseas shoppers offer another growth route
Domestic consumer spending is only part of the growth opportunity for UK retailers, according to Sean Douglas, Senior Director and Head of Enterprise Merchant at PayPal UK.
Douglas said the latest retail figures suggested that consumer spending was holding up despite continuing pressures on households and businesses. He also highlighted the caution shoppers were showing over where and how they spent.
“What our own data shows is that domestic demand is only part of the picture,” he said.
According to PayPal, millions of shoppers from more than 100 countries bought from UK businesses through its platform over the past year, spending more than £6.6bn.
Douglas said reaching overseas customers could offer retailers another route to growth as they navigate challenging trading conditions.
“There is a significant opportunity not just on the high street, but in reaching customers overseas who are actively seeking out British products and services,” he said.
The figures are PayPal’s own data and do not represent the entire UK cross-border retail market. They nevertheless highlight the international reach of some UK businesses and the potential importance of overseas demand alongside domestic sales.
For retailers considering international expansion, access to overseas customers offers a possible source of additional demand, although the September ONS figures do not measure the contribution of cross-border shopping to overall retail growth.
Christmas trading tests retailers
Found warned that a sharp fall in consumer confidence in October and intensifying inflation pressures had added to uncertainty ahead of the Budget.
He said the Budget would test whether households felt able to spend, businesses felt able to invest and financial markets believed the Government could support both while maintaining fiscal discipline.
“It creates a difficult start to the golden quarter,” Found said, referring to the key retail trading period towards the end of the year.
“Growth is available, but it is being won through relevance, innovation and disciplined execution, rather than broad market momentum.”
Quarterly growth offers retailers some encouragement ahead of Christmas. However, September’s weaker clothing sales and signs of consumer caution highlight the challenges facing businesses during a crucial trading period.
Pricing, promotions, product selection and stock management will remain important as retailers seek to attract spending and protect margins. For some businesses, reaching customers in overseas markets may also form part of their growth strategy.
