BRC: Disappointing Retail Sales Growth In October

The BRC has published retail sales data for October, covering the four weeks 29 September – 27 October 2024.

• UK Total retail sales increased by 0.6% year on year in October, against a growth of 2.6% in October 2023. This was below the 3-month average growth of 1.3% and the 12-month average growth of 1.0%.
  
  
• Food sales increased 2.9% year on year over the three months to October, against a growth of 7.9% in October 2023. This is below the 12-month average growth of 4.1%. For the month of Oct, Food was in growth year-on-year.
  
  
• Non-Food sales decreased 0.1% year on year over the three-months to October, against a decline of 1.0% in October 2023. This is above the 12-month average decline of 1.6%. For the month of October, Non-Food was in decline year-on-year.
  
  
• In-store Non-Food sales over the three months to October decreased 1.2% year on year, against a decrease of 0.1% in October 2023. This is above the 12-month average decline of 2.0%.
  
  
• Online Non-Food sales increased by 0.4% year on year in October, against an average decline of 2.5% in October 2023. This was below the 3-month average increase of 1.9% and above the 12-month average decline of 0.9%.
  
  
• The online penetration rate (the proportion of Non-Food items bought online) increased to 36.9% in October from 36.2% in October 2023. This was below the 12-month average of 36.4%.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:
“After a good start to Autumn, October’s sales growth was disappointing. This was part driven by half term falling a week later this year, depressing the October figures, and November sales will likely see more of a boost. Uncertainty during the run-up to the Budget, coupled with rising energy bills, also spooked some consumers. Fashion sales took the biggest hit as the mild weather delayed winter purchases. Health and beauty sales remained buoyant, with beauty advent calendars flying off the shelves.

“After a painful Budget for retailers, the hope is it will be less painful for households in the immediate term and consumer appetite will pick up in time for the Black Friday sales and festive season. Retailers must now grapple with over £5bn of new costs announced by the Chancellor, including in Employer National Insurance, Business Rates and the uplift in the National Living Wage. Managing this will hold back investment and growth in the short term, while further squeezing already-low margins and risking inflation.”

Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, said: “While October’s growth didn't continue at the levels seen for the retail sector in September, retailers will feel that there is mitigation and that they can pick up the pace again in November.

"Speculation about the impact of the Budget, a holding back of demand until Black Friday promotions, and a later half term break all impacted retail sales data over the last month.

“With clarity now provided by the Budget and many households escaping paying increased tax from their wages, retailers will be hoping for an upturn in consumer confidence and spending. Any positivity from retailers though will of course be dampened given the increased employment costs that they face.

“The promotional weeks around Black Friday will be the first real test of post-Budget consumer sentiment, with retailers looking to electronics promotions and new AI-linked products to build on the computing and mobile phone sales growth that has been one of the better areas of sales performance in recent months.”

Food & Drink sector performance | Sarah Bradbury, CEO, IGD, said:
“In October, UK food and grocery sales saw a modest step up in growth compared to September, but this period does not include the last five days of the month, when an uptick of spending around Halloween might have been expected. 

“However, the arrival of customary ‘pre-festive’ deals in categories such as wine helped boost sales in the second half of the month.  Importantly - volume, as well as value growth, remained positive despite a downbeat mood in the wider economy reflecting nervousness around potential tax hikes in the government’s budget.

“Shopper Confidence continues to reflect very differing shopper experiences, with lower income households feeling much more negative than higher income households. Retailers will be hoping that measures announced in the budget, such as the uplift in the minimum wage, will give a much-needed confidence boost to lower income shoppers and that the nation is looking forward to the coming festive period with more optimism.”

Source : BRC

Image : Stokkete / shutterstock.com / 503419588 

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