Retail sales volumes declined 0.4% in September, but grew by 0.7% for Q3 2026, according to the latest data from the Office of National Statistics (ONS).
The ONS data shows that the summer heatwave helped sales of food and beverages in Q3. Fuel sales also rose following lower sales in Q2.
Online retail sales volumes fell in September; clothing retailers have indicated that this was because the ongoing warm weather reduced the usual demand for autumn clothing. Supermarket sales also fell after growth in July and August.
Consumers remain cautious
Retail experts commenting on the ONS data have said it shows signs of consumer spending holding up, despite the financial pressures businesses and households currently face. Nonetheless, as retailers head into the Golden Quarter, and with Black Friday on the horizon, it’s clear that consumers remain cautious and selective about their spending.
“The run-up to Christmas decides the year’s profits for many non-food retailers like fashion and consumer electronics,” said Hai-Ly Nguyen Hai-Ly Nguyen, associate partner at McKinsey & Company. “If shoppers buy less on each trip, competition for every basket will be tougher, and margins are already tight going in. We could see discounts start earlier or go deeper as retailers race for Black Friday and holiday baskets.”
Stephen Rogan, head of customer success, EMEA at Shopify, indicated that he expects a muted Black Friday. “Perhaps the drop in sales is not as surprising when you consider over half (53%) of UK consumers report feeling negative economic impacts over the past year, according to Shopify’s Holiday Retail 2026 report,” he said. “With planned Black Friday weekend spending forecasted to drop to £165 from £181 in 2025, every pound consumers will be spending this holiday season will be a highly deliberate decision.
However, he highlighted that there are still opportunities for retailers during the Golden Quarter. “British shoppers are optimising their budgets by value-maxxing: spending more time researching, comparing and weighing up whether a purchase is worth it. Yet value does not simply mean paying less. Over half (54%) of UK consumers define good value as receiving higher-than-expected quality for the price, while 38% say it means products having a longer lifespan than expected.”
The importance of value
Rogan suggests that retailers can make a success of the Golden Quarter by communicating a clear value proposition to their customers. “With every sale likely to be hard-won, retailers must look beyond the immediate transaction and prioritise long-term loyalty,” he said. “Rewards programmes, improvements to delivery, tracking and returns, and AI-optimised inventories for enhanced product visibility are among the most effective strategies to return to sales growth this holiday season.”
Sean Douglas, senior director and head of enterprise merchant, PayPal UK, points to overseas sales as another growth opportunity for retailers. “What our own data shows is that domestic demand is only part of the picture,” he said. “Over the past year, millions of shoppers from more than 100 countries bought from UK businesses through PayPal, spending more than £6.6 billion. As firms look for growth, 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.”
September’s slowdown in retail sales volumes may be a warning sign rather than a trend, but it underlines an increasingly competitive trading environment. With margins under pressure and consumers scrutinising every purchase, retailers have little room for error as the year’s most important shopping season begins.
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