Retail sales slump as non-food tumbles to record low

UK retail sales fell 1% on a like-for-like basis last month and edged up 0.2% on a total basis, according the BRC-KPMG retail sales monitor.

Non-food sales plummeted 2.1% year-on-year on a 12-month basis, which, coupled with the fall in the category’s sales month-on-month, marked the starkest decline since the barometer started in January 2012.

Sales of non-food items were also down in the three months to October, tumbling 2.2% and 2.9% on a total and like-for-like basis respectively.

In contrast, food sales delivered a 2.4% rise in like-for-likes, while total sales grew 3.7% during the three months to the end of October.

Online also reported the slowest growth in sales since records began in December 2012.

‘A meagre month’

BRC chief executive Helen Dickinson said: “It was a meagre month in October for retail sales as shopping activity slumped. With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run-up to Christmas.

“The growth in food sales adds some colour to this otherwise anaemic picture, but these figures are very much buoyed by inflation.

“Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious in considering what purchases they can afford.

“Many now face higher borrowing costs, given the rise in interest rates, which will only serve to heap further pressure onto household finances.

“Considering the intrinsic link between consumer spending and economic growth, the Chancellor should reflect on this disappointing state of play and deliver a Budget that allays the risks of a further slowdown in consumer spending, by keeping down the cost of living.”

KPMG head of retail Paul Martin added: “After a brief uptick, fashion sales reverted to the dreary theme we have seen for a number of months this year. Unseasonably warm weather last month will not have helped, but this is unlikely to be the only reason the new ranges are proving unpopular.

“Overall growth online was lacklustre at best, although health and beauty products continued to stand out as a strong performer.

“The burning questions for retailers will be whether shoppers are holding off their purchases until Black Friday, and whether retailers can recover from this month’s poor performance to end the year on a high.

“With the Bank of England’s interest rate decision seeing the first hike in 10 years, we are likely to see a continuation of the sector’s slowdown, with consumers having less disposable income to spend.”