Yorkshire shop owners warn of 'dramatic' sales drops as customers tighten belts

Both the value and the volume of sales in the UK’s retail sector dropped last month for the first time since the end of 2021, as shoppers tighten their belts in the face of soaring prices.

Retail sales volumes declined by 1.6% in August, higher than the 0.5% expected, building on a downward trend that started around a year ago when Covid-19 restrictions were lifted for the hospitality sector.

Natalie Ormond, founder of Leeds-based sustainable lifestyle store, Smallkind: “As a small online retailer, orders have dropped dramatically since March when energy price rises hit the news and have been poor throughout the summer.

"I'm trying to stay optimistic about the second half of the year and am hoping the Christmas season brings in more orders as I stock sustainable toys and childrenswear. But with energy prices set to go up again in October I fear that people's budgets will get even tighter and it's the fast fashion and discount stores that will be busy rather than small ethical brands like mine. Small retail businesses desperately need the Government to address cost of living increases if we're to survive this year.”

Jem Young, founder of York-based upcycler No Forks Given Fabrications, said: “Sales have all but died in recent months. We are facing the point where we can't cover our household bills, never mind business bills. We are not optimistic for the future. We are exhausted. The cost of living crisis is 100% to blame. We were incredibly successful during the pandemic. The problems began once fuel and electricity and food costs started rising."

Government High Streets Task Force expert and ShopAppy founder, Dr Jackie Mulligan: “People just aren't spending amid the cost of living crisis. They're tightening their belts and then some. Retailers selling non-essentials are in a highly precarious position with inflation where it's at. The family businesses that line our high streets are being seriously challenged at present and this comes on top of two arduous years.

"They are facing a triple whammy of rising costs at home, rising costs in their business and financially squeezed customers who are spending less. The best thing we can all do is shop with them because any purchase from a local shop is an investment in our communities."

The ONS said that food shops, non-food shops, online retailers and fuel sellers had all registered declines in August – the first time since July 2021.

Non-store retailers – largely the online sellers – saw volumes drop by 2.6% in August, giving back some of the ground they gained during the pandemic. But sales in the sector are still a quarter higher than before lockdowns.

Lynda Petherick, retail lead at consultancy Accenture, said that retailers will be worried about the figures from the unusually warm August.

“With a difficult winter to come, it will come as a worry to retailers that shoppers have already reined in their spending despite the hot summer,” she said.

“The sombre atmosphere in the UK this week and news of slow economic growth will be adding to the sense of concern among retailers as the weather gets colder.

“Rising costs remain front of mind, and brands will be doing all they can to minimise outgoings and protect their margins for the months ahead.”