Record decline for non-food in October
BRC – KPMG: Retail Sales Monitor
In October, UK retail sales decreased by 1.0 percent on a like-for-like basis from October 2016, when they had increased 1.7 percent from the preceding year. On a total basis, sales rose 0.2 percent in October, against a growth of 2.4 percent in October 2016. This is the lowest growth since May and below the 3-month and 12-month averages of 1.7 percent and 1.5 percent respectively.
Helen Dickinson OBE, Chief Executive, British Retail Consortium said: “It was a meagre month in October for retail sales as shopping activity slumped. With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run up to Christmas.
“The decline was driven by the worst performance of non-food sales since our record began in January 2011, as consumers appear to have opted for outdoor experiences and excursions during half term, over visits to the shops. The growth in food sales meanwhile, adds some colour to this otherwise anaemic picture, but these figures are very much buoyed by inflation.“
Over the three months to October 2017, In-store sales of Non-Food items declined 2.2 percent on a Total basis and 2.9 percent on a Like-for-like basis. On a 12-month basis, the total decline was 2.1percent, the deepest since our records began in January 2012.
Over the three months to October, Food sales increased 2.4 percent on a like-for-like basis and 3.7 percent on a total basis. This remains above the 12-month Total average growth of 3.2percent, the highest 12-month average since July 2013.
Consumers focus on saving money in their food and grocery shopping
Helen Dickinson continued: “Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious in considering what purchases they can afford. Many now face higher borrowing costs, given the rise in interest rates, which will only serve to heap further pressure onto household finances.
“Considering the intrinsic link between consumer spending and economic growth, the Chancellor should reflect on this disappointing state of play and deliver a Budget that allays the risks of a further slowdown in consumer spending, by keeping down the cost of living. In other words, a shoppers Budget.”
Paul Martin, Head of Retail, KPMG explained: “October marked yet another reversal of fortunes for retailers, reinforcing just how volatile consumer spend has been. Despite the positive picture last month, these latest figures will be a real disappointment and not the start to the golden quarter retailers had hoped for.
“Clothing sales were particularly hard hit. After a brief uptick, fashion sales reverted back to the dreary theme we have seen for a number of months this year. Unseasonably warm weather last month will not have helped, but this is unlikely to be the only reason the new ranges are proving unpopular."
channels: retail
