Retail sales boosted by ‘aggressive promotions’

Retail sales inched up 0.6% on a total basis during the month, compared with an increase of 1.3% in October 2018, according to the BRC-KPMG Retail Sales Monitor.

This was the best performance since April 2019 and above the three-month average decline of 0.3% and 12-month increase of 0.1% – a new record low.

On a like-for-like basis, UK retail sales increased just 0.1% compared to October 2018. However, this is above the three- and 12-month averages of -0.8% and -0.4% respectively.

Food like-for-likes increased 0.5%, and 1.6% on a total basis, during the three months to October as non-food sales for the same period decreased 1.9% on a like-for-like basis and 1.8% on a total basis.

During the three months to October, in-store sales of non-food items slipped 3.6% on a total basis and 3.7% on a like-for-like basis.

Although October registered the lowest decline since July it was still worse than the 12-month average of a 3% increase.

Online sales of non-food products recorded a 5.1% increase in October compared to a 7.6% uptick during the same month the previous year. This was the strongest growth since February and higher than both the three- and 12-month averages of 2.5% and 3.6% respectively.

UK non-food retail like-for-likes decreased by 1.9% and 1.8% on a total basis during the three months to October. This was below the 12-month total average decrease of 1.1% during the month of October. 

BRC chief executive Helen Dickinson said: “Retailers embarked on an extraordinary period of discounting this October as they tried to entice shoppers into making purchases. Fashion shops were particularly active, helping non-food return to growth for the first time since July.

“Unfortunately, the longer-term trend remains bleak with the 12-month average sales growth falling to a new low of just 0.1%. With Brexit still unresolved and a December election creating new uncertainties, retailers will be looking nervously at the months ahead.”

KPMG head of retail Paul Martin said: “Growth of 0.1% like-for-like in October would normally be little cause for celebration, but after several disappointing months, any tiny hints of growth are most welcome. Retailers have clearly been peddling hard to win over disengaged shoppers, especially given continued Brexit uncertainty.

“Aggressive promotion to move stock has seemingly benefited fashion sales, both on the high street and online. However, the jury’s still out on whether that progress will benefit the retailers’ bottom line.

“Online sales have returned closer to normality, with a 5.1% uptick in October, but growth online remains muted. Fierce focus will be placed on the upcoming Black Friday and Cyber Monday events to kick things into better shape.”