UK retail sales experienced a decline in October, following three months of growth.
- The drop was influenced by budget uncertainties and warm weather.
- Sales decreased by 0.7% in October after a slight rise in September.
- Clothing stores were particularly affected, with a notable drop in sales.
- Experts express concern about consumer sentiment as the festive season approaches.
In October, UK retail sales witnessed a decline, marking the end of three consecutive months of growth reported by the Office for National Statistics (ONS). This downturn was attributed to budget uncertainties and the unusual warmth of the weather, which led consumers to spend less than anticipated. The overall sales dipped by 0.7% in comparison to the previous month’s modest growth of 0.1%.
The fall in sales was most pronounced among clothing stores, which saw a decrease of 3.1% as unseasonably high temperatures subdued consumer interest in seasonal attire. Non-food stores also experienced a downturn, with revenues falling by 1.4%, reversing the previous month’s gain of 2.3%.
Food store sales were not immune to this trend, experiencing a marginal drop of 0.6%. Furthermore, online sales decreased by 1.2%, with the most significant declines seen in non-food categories. These figures highlight a broader hesitation among consumers during the month.
ONS senior statistician Hannah Finselbach noted that while retail sales are on the rise across quarterly and annual periods, they have yet to reach pre-pandemic levels. Finselbach pointed out that the October decline was particularly driven by a poor performance in clothing sales, compounded by consumers holding back ahead of the budget announcement.
Lisa Hooker, PwC’s leader for consumer markets, remarked that declining consumer confidence, coupled with the timing of the budget, dampened shopping activity at a critical time for retailers. She observed early Christmas shopping among consumers, suggesting a cautious spending approach as the festive season nears. However, she also mentioned the lack of significant tax rises in the budget, which might not affect consumer spending power in the immediate term.
The October retail sales decline underscores a complex consumer landscape, marked by caution ahead of budget announcements.
