Retail sales growth disappoints in October

4th Nov 2024 07:22

(Sharecast News) - UK retail sales saw a modest increase in October, rising by 0.6% year-on-year, according to fresh data from the British Retail Consortium and KPMG on Tuesday.

The growth was markedly slower than the 2.6% uptick seen in the same month last year, and also fell below the three-month average growth of 1.3% and the 12-month average of 1%.

Food sales showed resilience, climbing 2.9% year-on-year over the past three months, although that was a notable slowdown from the 7.9% surge seen in October last year.

The sector continued to grow, albeit at a lower pace, with a 12-month average increase of 4.1%.

Non-food sales, however, remained challenging - the category saw a slight decline of 0.1% year-on-year over the three-month period, a marginal improvement over last year's 1.0% drop and better than the 12-month average decline of 1.6%.

In-store non-food sales dipped 1.2% year-on-year for the three months to October, faring slightly better than the annual average decline of 2.0%.

"After a good start to autumn, October's sales growth was disappointing," said BRC chief executive officer Helen Dickinson.

"This was partly 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."

Dickinson said fashion sales took the biggest hit as the mild weather delayed winter purchases, while health and beauty sales remained buoyant, with beauty advent calendars "flying" off shelves.

Online non-food sales provided a modest boost, growing 0.4% year-on-year in October, a reversal from the 2.5% contraction seen in October 2023.

While that growth lagged the three-month average of 1.9%, it exceeded the 12-month trend of a 0.9% decline.

The online penetration rate for non-food sales ticked up to 36.9% in October, slightly above the 36.2% recorded in the same month last year.

"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," Helen Dickinson added.

"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."

Reporting by Josh White for Sharecast.com.