“Many small business owners at breaking point” as retail sales decline in September

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Despite a rush on air fryers and heated blankets, UK retail sales volumes fell in September by 1.4 per cent – meaning shoppers bought 1.3 per cent less than in pre-covid February 2020.

The figures are the latest from the Office for National Statistics, which says the cost of living crisis as well as the bank holiday for the Queen’s State Funeral contributed to the decline.   

Clothing was the only category to experience an increase, as volumes rose by 0.1 per cent.

Overall non-food stores sales volumes fell by 0.6 per cent over the month and were 2.7 per cent below their pre-coronavirus February 2020 levels.

Household goods stores (including furniture) sales volumes fell by 1.5 per cent in September 2022. Other non-food stores, such as jewellery stores, reported a monthly fall in sales volumes of 0.7 per cent, while department stores fell by 0.6 per cent.

Food store sales volumes fell by 1.8 per cent and have followed a downward trend since summer 2021. In recent months, supermarkets have been seeing a decline in volumes sold because of increased food prices.

Government High Streets Task Force expert and ShopAppy founder Dr Jackie Mulligan says she is alarmed by the findings: “This latest data shows the worrying downward trend in sales and spend happening on our high streets.

“The small retail businesses that line our high streets are under phenomenal pressure at present, and the appalling events of the past few days in Westminster have simply added to the uncertainty.

“People simply aren’t spending amid the cost of living crisis and with their mortgage payments now going through the roof, too, their disposable income is reducing even further.

“People are understandably tightening their belts and the result is that small retailers selling non-food products are in a highly precarious position. They are facing a triple whammy of rising costs at home, rising costs in their business and financially squeezed customers who are spending less.

“The best thing shoppers can do is avoid global giants and shop with our small local businesses. As small retailers suffer, the likes of Amazon have the financial advantages stacked in their favour to ride out the storm. This will be to the detriment of high streets and local communities.”

Alan Thomas, UK CEO at Simply Business, adds: “The unsurprising fall in retail sales clearly underlines the harsh economic climate that SMEs are currently facing. The fact is that many small business owners are at breaking point.

“Our SME Insights Report indicates that small business owners need government support, with three in five calling for a review or reduction of the energy price cap. The UK’s 5.6 million small businesses account for over 99 per cent of the firms operating in the country and contribute trillions of pounds to the economy.

“When addressing the cost of living crisis, the government cannot forget the crucial role small business owners will need to play when it comes to our recovery. If the chancellor is to deliver on his high-growth, low-tax plans, SMEs need to be front and centre of the response.”