Retail sales slump to new post-Covid low as inflation bites margins

Retail sales slump to new post-Covid low as inflation bites margins

  • September displays the slowest sales growth since shops reopened post-Covid
  • Total like-for-like sales increased by +2.8% compared to September 2021
  • Homewares sales fell by -6.3% signalling consumers are postponing large purchases
  • Online sales slumped by -2.5%, the second consecutive negative result

Inflation, economic crises, and a bank holiday have combined to push retail sales figures to a new post-Covid low, new figures by accountancy and business advisory firm BDO LLP reveal.

According to BDO’s High Street Sales Tracker (HSST), total like-for-like (LFL) sales, combined in-store and online, increased by just +2.8% in September compared to a base of +19.7% in the equivalent month last year. This follows a similarly poor set of results in August, which was the previous lowest post-Covid performance for retail sales. Total non-store LFLs fell for the second time since March this year, declining -2.5% compared to September 2021.

Total in-store LFLs recorded the lowest result (+7.2%) since February 2021.

September began with total LFLs recording an increase of +3.88%, compared to +19.59% for the equivalent week last year. Growth then peaked in the second week of the month at +4.86% compared to the same week in September 2021. However, the second half of the month saw a significant decline, with sales growth of just +2.76% and +1.33% in the third and fourth weeks respectively. The fourth week of the month coincided with the bank holiday to mark the funeral of Queen Elizabeth II, which will no doubt have impacted sales figures.

Sector Results

September marks 19 consecutive months of positive total LFL sales figures for the fashion sector, with a rise of +6.7% from a base of +32.0%. However, at a time when retailers would normally expect shoppers to be spending on their autumn and winter wardrobes, this disappointing result reflects heightened consumer caution when it comes to discretionary spending.

Total LFL sales for the lifestyle sector increased by +1.2% in September, compared to +14.2% in September 2021. These results are even lower than those recorded in August, which was the sector’s previous worst performance since stores reopened in February 2021.

September was also a disappointing month for the homewares sector, where total LFL sales fell by -6.3%, from a base of +7.9%. Having spent significant sums refreshing their living spaces during COVID-19 lockdowns, many consumers are now likely tightening their belts and postponing bigger single purchases.

Sophie Michael, Head of Retail and Wholesale at BDO LLP, said:

“Following a poor set of results for August, many would have been hoping for a stronger September as we move into the Golden Quarter. While the overall like-for-like is not quite going backwards across all discretionary spending categories, it’s clear that it’s trending downwards. September has clearly not provided the much-needed boost as we head into the final three months of this year, which is critical for most retailers, and particularly for those in the discretionary spend categories.

“The actual performance for retailers may be even worse than these results suggest. With rising inflation, data suggests that the actual volume of sales is down significantly while it is higher prices that is driving the growth. In addition, with the pound’s current level against the US dollar and euro, retailers that rely on imports are paying more for their products, eating into already slim margins. The one bright spot is that with the pound’s weakness, the UK becomes an attractive destination for overseas tourists doing their Christmas shopping. However, this is unlikely to provide much of a boost to retailers beyond flagship stores in major cities.

“Retailers will need to focus on mitigating these impacts, by making operational savings wherever possible, and being very smart with their product purchasing, keeping it relevant and focussed on their target customer, thereby limiting the risk of high stockholdings at the end of the season. However, with such turbulence in the wider economy, there is only so much that retailers can do to preserve their business and there is therefore no doubt that the sector needs to brace for a harsh winter ahead.”


Note to editors

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

The organisations we work with are Britain’s economic engine –entrepreneurially-spirited, high-growth businesses that fuel the economy.  

We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed. 


BDO LLP operates in 18 offices across the UK, employing 7000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

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The BDO global network provides business advisory services in 164 countries, with 95,000 people working out of 1,713 offices worldwide. It has revenues of $11.8bn. 


Fergus Lynch or Isobel Wackett
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