Retail sales, September 2026: growth slows to 1.3% as shoppers wait for the Budget

This article is for shop owners, independent retailers and multiple-site operators who want to know how trading is going and what it means for their cash flow. The latest BRC-KPMG Retail Sales Monitor, published on 13 October 2026, shows sales growing slowly as shoppers wait for the Budget. Below we set out the figures and the funding options for retailers. Smart Funding Solutions is a broker, not a lender: we compare whole-of-market options across 300+ lenders, arranging funding from £10,000 to £20 million.

01The headline figures for September 2026

The British Retail Consortium figures cover the five weeks from 30 August to 3 October 2026, compared with the same period a year earlier:

• Total sales rose 1.3%, against growth of 2.3% in September 2025. The 12-month average is 1.5%.
• Food sales rose 2.5%, against 4.3% a year earlier.
• Non-food sales rose 0.3%, against 0.7% a year earlier.
• In-store non-food sales rose 0.1%, while online non-food sales rose 0.7%.
• Online penetration, the share of non-food sales made online, was 38.3%, up from 37.9%.

Linda Ellett, UK head of consumer, retail and leisure at KPMG, said "non-food sales were essentially flat and have declined slightly across the last three months", and that "retailers will need to balance customers' increasing appetite for value against the need to protect margins."

02Business rates and the Budget

The BRC has made costs its main message before the Budget. Helen Dickinson, its chief executive, said "Another rise in business rates would push up pressure on prices" and "With confidence fragile, this Budget is a critical test." Retail, hospitality, leisure and small business leaders met the government at Downing Street on 13 October to discuss rising operating costs.

Official figures give a slightly brighter picture. The Office for National Statistics reported that retail sales volumes rose 0.5% in August 2026, after a 0.5% fall in July, and were 2.4% higher than a year earlier. The September official figures are due on 23 October.

See our Autumn Budget 2026 article for what is expected on tax.

03What it means for retailers

Slow non-food sales and rising costs squeeze margins from both sides. At the same time, October and November are when most retailers buy stock for Christmas, paying suppliers weeks before the sales come in. A cautious shopper makes that bet harder to call, and a business that runs short of stock in December can lose its best weeks of the year. Equally, too much stock left in January ties up cash just as rent, rates and VAT fall due.

Planning the stock build and the cash to pay for it, rather than relying on an overdraft that may be reviewed, gives retailers more control. Our guide to seasonal business finance explains how to fund the gap between buying stock and selling it.

04Funding options for retailers

• Stock finance pays suppliers for Christmas stock, repaid as it sells.
• Merchant cash advance is repaid as a share of card takings, so it flexes with trading.
• Trade finance pays overseas suppliers before goods arrive.
• Working capital loans cover wages, rent and rates through quieter months.
• Fit-out finance spreads the cost of a shop refit.

Our retail business loans page brings these together. Online sellers should see our e-commerce loans page, and convenience stores our guide to grocery store financing.

05What lenders look at for retailers

Lenders judge a retailer mainly on its trading record. Expect questions about turnover and margins over the last year, how much of your income comes through card terminals or online, how quickly stock turns and how seasonal your sales are. Card-based products look closely at your monthly card takings, while stock lenders want to know who your suppliers are and how long stock sits before it sells. A clear plan showing how the Christmas stock will be sold, and how the money will be repaid in January, makes an application much stronger. Existing borrowing, any arrears with HMRC and how your business bank account is run will also be checked.

06How to compare your options

1. Work out how much stock you need for Christmas and when each supplier must be paid.
2. Decide whether you need to fund stock, a refit or a general gap in working capital.
3. Have recent bank statements, card takings and your latest accounts ready.
4. Use Instant Quotes to see your lender matches instantly, with no credit check.
5. Compare offers on the total amount you repay and how repayments fit your trading pattern.

Shoppers are cautious, but Christmas still makes or breaks the year for many retailers. Get your Instant Quotes to see which lenders could fund your stock. Lenders make every decision, and all finance is subject to status.