In October, retail sales experienced a notable decline as financial pressures impacted consumer behaviour. The Office for National Statistics (ONS) reported a 0.7% fall, with the sector facing significant challenges.
- The textile, clothing, and footwear categories saw a sharp 3.1% decrease in sales, reversing prior growth trends.
- Uncertainty surrounding the Chancellor’s Budget has fueled caution among retailers as they navigate increased costs.
- Despite a slight increase in sales volumes over the past three months, October’s results show a general downturn.
- Retailers are focused on enhancing value and consumer experience to boost confidence and spending during the festive season.
In October, retail sales faced a downturn, with figures from the Office for National Statistics (ONS) indicating a 0.7% decline. This followed a minor increase of 0.1% in September, which has since been revised downward from an earlier estimate of 0.3%. The drop was largely attributed to Budget uncertainty, which affected non-food store sales volumes, including clothing, household items, and other goods.
The textile, clothing, and footwear sectors were the most affected, registering a significant 3.1% decline in sales. This decrease marks a shift from the previous three months, where sales had been buoyed by end-of-season promotions and favourable weather. The fall in these categories led the overall non-food store sales volume to decline by 1.4% after a 2.3% rise in the preceding month.
Oliver Vernon-Harcourt, head of retail at Deloitte, commented that October’s figures represent a more subdued picture for the retail sector. He noted the challenging circumstances retailers face due to the Chancellor’s Budget, which imposes additional costs. Retailers are cautiously optimistic that the festive season might encourage consumers to increase spending, despite the current disconnect between consumer confidence and actual expenditure.
Over the broader period of the three months leading up to October, retail sales volumes had actually increased by 0.8% compared with the preceding quarter. However, October’s data reveals a more immediate concern for retailers, necessitating strategies to reconnect consumer confidence with spending habits.
Retailers are now keenly focused on enhancing the value proposition and shopping experience both in physical stores and online. As they approach their busiest trading months, bridging the gap between consumer confidence and spending will be pivotal to sustaining business momentum.
Retail sales have faced setbacks amid ongoing financial uncertainties, necessitating strategic adaptation from retailers.
