Food sales fall as households struggle to make ends meet

Retail sales in Britain fell beneath pre-pandemic levels in September 2022, as soaring prices prompted consumers to rein in spending. While many stores lost trading by closing on the day of the Queen’s funeral, the greater loss likely relates to shoppers tightening their belts ahead of winter fuel bills.

According to the Office for National Statistics, the UK’s retail sales dropped by 1.4% for September 2022, against a forecast of a 0.5% fall by City economists – suggesting a deepening cost-of-living crisis which has been underestimated by experts. It marks the first month that volumes have fallen below pre-pandemic levels – but worse still, suggests many shoppers are already choosing between heating and eating as temperatures plummet.

While food sales tend to be robust during crises, with customers instead reining in ‘non-essential spending’ to weather the storm, the latest figures show that food store sales fell faster than the average. This may be because many consumers had already economised elsewhere, and were now faced with the need to bring down their food budget as well – something which saw budget-conscious consumers cut their food spending by 1.8%.

The figures come as households across the country come under pressure from inflation hitting its highest level for 40 years on the back of soaring food prices – which were recently summarised by a famous picture of a package of margarine that now costs more than £7, and has a security tag to prevent it being shoplifted. And with any plans to help with fuel bills having been shredded by the government in the wake of a market slump, some reports now suggest households will face £5,000 energy bills from next year – deepening the crisis even further.

“Retail sales continued to fall in September after a weak August, and consumers are now buying less than before the pandemic,” said Darren Morgan, a director of economic statistics at the ONS. “Drops were seen across all main areas of retailing, with falling sales in food stores making the largest contribution.”

The ONS also found that online shopping – which enjoyed a historic boom in lockdown – has seen sales tumble by 3% in September. While that is still 18% above pre-pandemic levels, it shows that no segment is insulated from the current downturn. At the same time, consumers were found to be more economical with how they use their vehicles, with automotive fuel sales volumes falling by 1.3% last month.