Retailers are entering the final quarter of 2025 with a mix of cautious optimism and increasing concern. Recent data from the British Retail Consortium (BRC) indicates that, although sales continued to rise in September, the rate of growth has slowed. This slowdown is attributed to households tightening their spending and businesses bracing for a more uncertain winter ahead.
According to the BRC, total retail sales increased by 2.3% in September compared to the same month last year, a slight improvement from the 2.0% increase observed a year earlier. However, a closer look at the data reveals a mixed picture. Food sales rose by 4.3%, primarily driven by ongoing price inflation rather than a significant increase in demand. In contrast, non-food sales showed much weaker growth, rising by only 0.7%. Categories such as clothing and homeware were particularly affected by unseasonably mild weather and fragile consumer confidence.
BRC CEO Helen Dickinson noted that with the Budget approaching and household bills increasing, the momentum of consumer spending is slowing down. She mentioned that this month's mild weather may have postponed shoppers' purchases for their autumn wardrobes. Furthermore, she indicated that much of the growth in food sales is attributed to inflation rather than an actual increase in consumption.
On a more positive note, Dickinson pointed out that the launch of the new iPhone and Apple Watch supported stronger demand for electrical goods.
Dickinson highlighted several challenges facing the retail sector heading into the holiday season:
Consumer sentiment is slipping. The BRC’s consumer confidence index dropped—expectations for the UK economy fell from –32 in August to –36 in September.
In short: while retail sales continue to grow, the pace has cooled. With inflation, tax uncertainty, and weak consumer confidence all weighing on demand, many retailers may tighten their belts this winter.
For businesses operating in or supplying the retail sector, this slowdown sends a clear signal: cash flow and credit control will be critical in the months ahead. When consumer demand softens, the ripple effect can hit supply chains fast. Late payments, reduced order volumes, or sudden business failures can all strain financial stability — particularly for small and mid-sized suppliers.
As the BRC warns, retailers are entering the “Golden Quarter” — the crucial run-up to Christmas — with muted confidence. While consumer behaviour remains unpredictable, the fundamentals of good business management haven’t changed: know your customers, understand your partners, and stay informed.
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Business credit monitoring is a proactive solution that tracks the financial stability and creditworthiness of customers or suppliers you work with. Staying on top of your customers' and suppliers’ financial health is essential. It provides updates and insights that may affect your business to help you make smarter credit decisions, reduce risk, and protect your cash flow.
In a retail climate where margins are tight and uncertainty is high, having this level of visibility and flexibility can be the difference between staying resilient and facing costly surprises.
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