British retail sales growth slowed sharply last month as shoppers grew increasingly cautious ahead of the government’s Autumn Budget announcement.
Total sales at UK retailers rose by just 1.3 per cent in the 12 months to September, a notable drop from the 2.3 per cent growth recorded in September 2025.
The figures, compiled by the British Retail Consortium and KPMG, painted a picture of subdued consumer appetite across much of the high street.
The BRC, which represents major retailers including Tesco, Sainsbury’s and Marks and Spencer, warned that member firms are holding off cost rises but cannot withstand a Budget that brings in higher taxes.
Food sales were the primary driver of overall retail growth, rising 2.5 per cent, though that figure still fell well short of last September’s 4.3 per cent increase and the 3.1 per cent 12-month average.
Non-food sales were broadly flat, edging up just 0.3 per cent against a yearly average of 0.2 per cent, reflecting the cautious mood among British consumers.
Health and beauty recorded its strongest month of the year, with Pokemon’s 30th anniversary products, including branded trading cards, providing a notable boost to toy sales.
Fashion weighed on overall sales growth, with analysts suggesting that prolonged summer temperatures may have delayed shoppers’ switch to autumn and winter wardrobes.
Linda Ellet, KPMG’s head of consumer, retail and leisure, said consumers are becoming “increasingly selective” amid growing fears that the Iran war is driving inflation.
She said: “This is a battle for share of wallet, with shoppers prioritising some categories while postponing purchases elsewhere. With the Black Friday promotional period approaching, some consumers will inevitably be questioning whether today’s purchase might be cheaper tomorrow.”
Sarah Bradbury, chief executive of retail insights firm IGD, said pre-Budget tax speculation will be “weighing on shoppers’ minds, with these factors adding pressure to household finances and translating into weaker spending.”
Bradbury added that while Halloween may support impulse grocery sales in the short term, food businesses’ attention will be firmly on the Budget and what it could mean for consumer spending power and demand heading into 2027.
Retailers have urged Chancellor John Healey to avoid a so-called warehouse tax and instead exempt high street businesses from the highest business rates multiplier.
Helen Dickinson, chief executive of the BRC, said: “The Chancellor cannot promise to ease the cost of living while piling more costs onto the retailers working to keep prices down.”
Dickinson added: “Another rise in business rates would push up pressure on prices, choke off high-street investment and put local jobs at risk. This Budget must back retail to invest, employ and grow, not make it harder.”