October 2012 BRC-KPMG retail sales figures disappoint

UK retail sales values were down 0.1% on a like-for-like basis from October 2011, when they were down 0.6% on the preceding year. On a total basis, sales were up 1.1%, against a 1.5% rise in October 2011.

Excluding Easter, this was the lowest growth in total sales since November 2011. The slowdown from last month was felt across all categories, including online sales.

With a 3-month average of 3.4%, food was more resilient than non-food. However, once inflation is stripped out, volume growth for food was stagnant.

Stephen Robertson, Director General, British Retail Consortium, said: "Unfortunately it looks like the modest sales revival we saw in September was something of a false dawn. Excluding April, hit by this year's earlier Easter, October saw the worst sales growth since last November. And October's poor performance wasn't a one off. Year-to-date average growth hasn't outpaced inflation meaning overall sales volumes going backwards. Within that, October's online, non-food, results were especially poor. The last three months now include the two weakest growth rates we've recorded in four years.

"The disappointing figures are a reminder of the difficult economic realities many are still facing. Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying.

"Half-term fell later this year, so lower footfall translated into patchy performances across the categories.

"This underwhelming showing means there's all to play for as Christmas approaches."

David McCorquodale, Head of Retail, KPMG, said: "October's sales figures were like a disappointing firework - full of promise initially but eventually fizzing out with a whimper. With the touch paper lit from strong September sales figures and positive broader economic figures emerging through the month, it was broadly anticipated that we'd have a strong October.

"Like a rocket, clothing and footwear sales soared into double-digit like-for-like growth in the first week but then faded in the latter half of the month, showing that consumers may have bought into autumn/winter collections but are still too nervous to fill their wardrobes with them.

"The recession may officially be over but it will take a little longer for consumers to feel they can spend freely again. Retailers are holding less stock than a year ago and may choose to be cautious with pre-Christmas sales in order to protect margins. However, the disappointing sales figures for October indicate that winning share of the Christmas wallet will be just as competitive over the next two months as it was last year."

Source : BRC
www.brc.org.uk/brc_news_detail.asp?id=2321