UK total retail sales increased by +0.6% YoY in October, against a growth of +2.6% in October 2023, according to the latest BRC-KPMG Retail Sales Monitor.
Non-food sales decreased -0.1% YoY over the three months to October, against a decline of -1.0% in October 2023. For the month of October, non-food sales were in YoY decline.
In-store non-food sales over the three months to October decreased -1.2% YoY, against a decrease of -0.1% in October 2023, while online non-food sales increased by +0.4% YoY in October, against an average decline of -2.5% in October 2023. The online penetration rate increased to 36.9%, from 36.2% in October 2023.
Helen Dickinson OBE, chief executive of the British Retail Consortium (BRC), says: “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.
“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 £5b 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 and leisure, KPMG, adds: “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.”
