UK retail sales saw a decline in October following a brief period of growth.
- The Office for National Statistics reported a 0.7% drop in sales.
- Clothing stores were notably impacted, experiencing a 3.1% decrease in sales.
- Consumer spending hesitated amid anticipation of budget announcements.
- Despite early Christmas shopping, consumer sentiment remained low.
UK retail sales decreased by 0.7% in October, following three months of modest growth, according to data from the Office for National Statistics (ONS). This downturn in sales is largely attributed to the uncertainty surrounding the budget and unseasonably warm weather, which led to a reduction in spending among consumers.
Particularly affected were non-food store sales, which fell by 1.4%, despite a rise of 2.3% in the previous month. The clothing sector was hit hardest, registering a 3.1% decline in sales as warmer temperatures in October deterred typical seasonal purchases.
Food stores were not immune to this trend, as their revenues slipped by 0.6%. Online sales, similarly, experienced a downturn of 1.2%, highlighting a broader hesitation in consumer expenditure across multiple retail sectors.
Hannah Finselbach, a senior statistician with the ONS, explained that while there is a general upward trend in retail sales over three-month and yearly analyses, figures remain below pre-pandemic levels. In her words, “When we look at the wider trend, retail sales are increasing across the three-month and annual periods, although they remain below pre-pandemic levels.”
Industry experts, such as Lisa Hooker from PwC, noted the impact of waning consumer sentiment due to the budget’s uncertainty. Hooker stated, “It’s clear that falling consumer sentiment and uncertainty ahead of the budget at the end of last month put a dampener on shoppers’ plans, with unfortunate timing at the start of retail’s critical golden quarter.” Despite an early start to Christmas shopping reported by consumers, this has not significantly alleviated the overall low consumer confidence.
On a brighter note, Hooker observed that the budget did not introduce significant overnight personal tax increases, which suggests there could still be hope for a recovery in consumer spending in the near future.
Overall, the October dip in retail sales highlights consumer caution amidst economic uncertainties.
