Pre-Christmas sales have given UK retail sales a small boost in October amid ‘encouraging growth’ after a disappointing slowdown in September, the British Retail Consortium (BRC) has said.
UK retail sales inched up 0.8 per cent compared to the same period last year, but food and clothing experienced a decline in sales growth and shrinking volumes.
The BRC said sustained demand for new games and gadgets was driving the improvement.
“It’s encouraging to see growth heading in the right direction again after a disappointing slowdown in September,” said BRC director general Helen Dickinson.
The online penetration rate was 18.3 per cent in October, the highest level ever recorded by the BRC Monitor over 23 months. Sales of non-food products over the internet in the UK grew 12.1 per cent in October versus a year earlier.
Helen Dickinson added: “There was also a strong showing for home accessories and textiles. In contrast, clothing sales fell for the first time since March, suggesting that many customers prioritised leisure and home improvements over refreshing their wardrobes until more autumnal conditions took hold.”
She added: “Consumer confidence paused in October, and while conditions remain challenging, the signs are that customers are managing their budgets well while allowing some leeway for occasional treats. Retailers will be looking to respond to this appetite for good value with a little luxury here and there in their promotions and product offerings for the Christmas period.”
Food sales growth averaged 2 per cent for the last three months – below recent levels of inflation. Affected by the unseasonably warm weather, clothing saw a decline in total sales for the first time since March.
David McCorquodale, Head of Retail, KPMG, said that the October reminded retailers that recovery is a slow, relentless slog.
“Whilst the summer months hinted at increased consumer confidence, retailers will struggle to maintain a sustained sales recovery until wage growth outpaces price inflation. While confidence may lead consumers to browse, it’s cash that’s needed in the tills,” he said.
“The fight for market share in the food and drink space, whilst offering value for the consumer, reduced the 3-month growth figure below inflation. Clothing and footwear had a difficult month as temperatures refused to drop, whilst other non-food items such as electricals performed better, aided by the online channel.”