Retail sales volumes declined 0.7% in September, reversing a jump in August, according to the Office for National Statistics (ONS).
The month-on-month decline meant that third-quarter retail growth slowed to a rate of 1.5% – its lowest since the second quarter of 2013.
Year on year, the quantity bought in the retail sector excluding fuel increased 1.6%, with non-food and online spearheading growth.
Sales by value
Retail sales values rose 4.6% last month, compared to the same period last year. But, on a month-by-month basis, they slid 0.6%.
This – the first monthly decline since May – suggests that year-on-year growth is linked to price rises.
The ONS said retail prices continued to rise across all store types and were up 3.3% from a year earlier, the highest year-on-year increase since March 2012.
Despite September’s sales fall, ONS senior statistician Kate Davies said: “There is a continuation of the underlying trend of steady growth in sales volumes following a weak start to the year, and a background of generally rising prices.
“These increased costs are reflected in the more rapid growth in the amount spent when compared with the quantity bought.”
Online sales values increased 14% year on year, and online now accounts for 17% of all retail spending – £1.2bn a week.
It comes as the Bank of England mulls the first interest rate hike in a decade, which Deloitte head of retail Ian Geddes said could cause an “additional headache for retailers in the lead up to Christmas”.
Looking ahead, Geddes said: “Against a well-documented backdrop of rising inflation, increasing levels of debt and fragile consumer confidence, the retail industry will have been looking forward to entering the final three months of the year – typically a crucial trading period that encompasses both Black Friday and the Christmas shopping periods.
“However, the prospect of the Bank of England raising interest rates for the first time in over 10 years next month could come at a challenging time for the retail sector.
“Issues around consumer finances, spending power and rising cost pressures are already challenging the industry: an interest rate rise could cause an additional headache for retailers in the lead up to Christmas.”