Retail sales volumes in the UK fell 0.8 per cent month-on-month in October, the biggest decrease since April, as consumers tightened their belts ahead of Christmas, according to figures released today.
Year-on-year estimates show a 0.6 per cent increase according to the Office for National Statistics while retail sales values rose 1.6 per cent compared with October 2011, though the shock monthly decline highlights the “renewed weakness of the high street”, an expert said.
Samuel Tombs, UK Economist at Capital Economics, said of the figures: “October‘s official retail sales figures support the timelier surveys in suggesting that the recovery on the high street is losing momentum ahead of the crucial Christmas shopping season.
“The decline in October gets the fourth quarter off to a very weak start.”
In the food store sector, volumes dropped 0.6 per cent, the biggest monthly drop since last November, and non-food sales volumes fell one per cent compared with a month earlier, though the latter saw some improvement compared with October 2011.
Non-food sales volumes jumped 1.3 per cent year-on-year though food continued to disappoint, down 0.7 per cent on last year.
During the four week period, the average weekly spend was £6.8 billion, up 1.5 per cent on October 2011 while the average weekly online spend jumped 11 per cent to £562 million.
Nonetheless, the sales values drop is significant, particularly given the 0.5 per cent boost reported in September and is in keeping with recent findings by the British Retail Consortium which found earlier this month that UK retail sales growth in October was at its lowest for nearly a year excluding Easter.
David McCorquodale, Head of Retail at KPMG, commented: “October‘s lacklustre sales are disappointing, with both sales values and volumes falling after the minor uptick witnessed in September.
“The figures will put even more pressure on retailers to get Christmas right and will certainly influence how they approach the next five weeks of trading.
“We may see some decide to ‘up the ante‘ and begin significant promotions and discounts in order to win sales from their competitors. This can be a high risk strategy.
“Discounting can drive footfall, but if retailers cut too deeply this can impact profitability at a vital time of year.
“One thing is clear: the high street remains as competitive as ever. While consumer confidence remains shaky retailers will have to fight hard to win a share of the Christmas wallet.”