October retail sales grow at weak pace amid ongoing Brexit uncertainty

267
ONS October retail sales grow at weak pace amid ongoing Brexit uncertainty
The ONS said October retail sales increased at a slower rate in the latest three months, with growth the weakest seen since April 2018.
// Sales over the three months to October rose at their weakest pace in a year-and-a-half, according to the ONS
// Monthly retail sales volumes unexpectedly fell by 0.1%
// Meanwhile sales posted a weaker-than-expected 3.1% increase compared to October 2018

Consumers were cautious in their spending in October despite showing sustained confidence in the face of Brexit uncertainty, new official figures show.

Sales over the three months to October rose at their weakest pace in a year-and-a-half, according to the Office for National Statistics.

Monthly retail sales volumes unexpectedly fell, by 0.1 per cent, while sales posted a weaker-than-expected 3.1 per cent increase compared with October 2018.

All main sectors saw falling sales apart from food retailers.


READ MORE:


Over the three months to October – a figure that evens out monthly volatility – sales rose by 0.2 per cent compared with the previous three-month period.

This marked the weakest rise since the three months to April 2018, and 2.9 per cent higher than a year before.

“Retail sales increased at a slower rate in the latest three months, with growth the weakest seen since April of last year,” an ONS spokeswoman said.

“All main sectors saw falling sales apart from food shops.

“Department store sales rebounded in October, driven by promotional events and an earlier introduction of Christmas lines.

“However, their sales still remain significantly down over the longer term.”

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “October can feel a bit like the calm before the storm in retail and this year is no exception, with last month once again serving as the warm-up act before the main event.

“The result was slightly below expectations but decent enough in a tough environment, with a welcome return to form of sorts for department stores, albeit driven by some early discounting.”

She added: “There’s been a lot of speculation around the impact a General Election at an inconvenient time might have on retail, but I think this is probably overstated, with consumers’ short-term spending plans unlikely to be significantly affected by going to the polls.”

Ed Monk, associate director for personal investing at Fidelity International, said: “With many of the UK’s largest retailers unveiling their festive adverts this week, the countdown to Christmas is well and truly on.

“However, this morning’s retail sales figures – which once again show households cautious in their spending – suggest it could be a long, hard winter. The sales periods around Black Friday and Christmas will, once again, prove crucial.

“While a first winter election since 1923 is likely to prompt further caution amongst spenders, whether this detracts from the usual Christmas sales spree awaits to be seen.

“With the end of the year drawing close, stalling wage growth and a slowing rate of inflation highlight the strain the economy is under.

“The coming weeks will be key in helping to decide the sort of saving and spending resolutions households around the UK make as we enter the new year.”

Don Williams, retail partner at KPMG UK, said: “October naturally kicks off the all-important ‘golden quarter’, when many retailers achieve the vast majority of their annual revenue, making these months pivotal to the entire year’s success or failure.

“The latest figures suggest that sales have been somewhat static, many will be hoping that consumer demand is on hold in anticipation of Black Friday and Christmas to come.

“That said, retailers have already had to aggressively discount products to get stock moving after a series of disappointing months, so it remains to be seen whether further discounting to come will be to the detriment of the retailer’s bottom-line.”

Click here to sign up to Retail Gazette‘s free daily email newsletter