UK retail sales growth slowed to an annual rate of 2.5% in October, according to fresh figures from the British Retail Consortium and KPMG, as milder weather and deal-hunting ahead of Christmas delayed seasonal spending.
The BRC-KPMG Retail Sales Monitor showed growth slipped from 2.7% in September, and 4.1% in August.
This was well below the three-month average of 3.1% and the 12-month average of 4.2%
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The three-month average growth in food sales rose to 7.9%, from 7.4% the month before, while non-food sales were down 1%, from -1.2% the month before.
“Retail sales growth slowed as high mortgage and rental costs further shook consumer confidence,” said BRC chief executive Helen Dickinson.
“Many households are also delaying their Christmas spending in the hopes they can grab a bargain in the upcoming Black Friday sales. The cost-of-living squeeze meant more was spent on lower-price indulgences, such as beauty products – the so-called ‘Lipstick Effect’. Meanwhile, the arrival of some colder weather helped to boost fashion sales, particularly for outdoor wear.”
While KPMG head of retail Paul Martin pointed out that online sales continued to “struggle”, with sales falling in every category other than health and ‘other non-food’. “This could herald the most competitive Black Friday period that we’ve seen in a while,” he said.
Dickinson added: “Retailers continue to invest in lowering prices and streamlining their operations, part of their commitment to delivering an affordable Christmas for their customers. But this is put at risk by the £470m-per-year rise in business rates facing retailers next year. The Chancellor must freeze rates in the upcoming Autumn Statement, to prevent extra cost pressure, pushing up prices for struggling consumers.”
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