Retail gross sales took an surprising fall final month, based on official figures suggesting a hunch to COVID lockdown ranges with solely on-line operators seeing development.
The Office for National Statistics (ONS) reported a 0.3% decline total in October 2023, following a fall of 1.1% in September.
An increase in volumes of 0.3% had been anticipated by economists.
Sales fell 1.1% within the three months to October in comparison with the earlier three months, the ONS added.
Its deputy director for surveys and financial indicators, Heather Bovill, stated: “Retail gross sales fell once more in October to their lowest degree since February 2021 when widespread lockdown restrictions have been in place.
“After rebounding in September, fuel sales dipped with increasing prices discouraging customers, while food sales also dropped as consumers prioritised essential goods.
“It was one other poor month for family items and garments shops with these retailers reporting that cost-of-living pressures, diminished footfall and poor climate hit them laborious.
“However, it was a better month for online retailers, the only main sector to report growth in October.”
Their volumes have been 0.8% larger on the earlier month, the info confirmed.
Of the remaining, the sharpest decline, of two%, was felt by gasoline retailers.
Households nonetheless have good motive to be cautious given the squeeze on their funds from power, meals, mortgages and rents.
Consumer spending accounts for 60% of the UK economic system and any declines will make worrying studying for these involved that the UK economic system is vulnerable to recession – that is two consecutive quarters of damaging development.
Zero development for the third quarter of the 12 months, in an preliminary studying, stays vulnerable to being revised down.
But there are economists and trade consultants who consider that customers aren’t extensively in dangerous form and plenty of have been saving as much as permit for better spending through the festive season.
Pantheon Macroeconomics stated of the info: “The further fall in retail sales in October, which left sales 3.9% below their 2022 average level, likely will be reversed in the coming months, due to robust growth in households’ real disposable incomes.”
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The first check of that idea can be Black Friday, which may ship a lift to development prospects within the present fourth quarter.
Deann Evans, managing director for Europe at ecommerce platform Shopify, stated: “Retailers can be forgiven for anticipating a difficult holiday shopping season, with the latest ONS figures showing a continued slowdown in British retail sales.
“But our information counsel that many consumers have used latest months tactically to save lots of in preparation for the vacation season.
“In fact, over half (53%) of UK shoppers have been putting aside more money each month than they have in previous years.”