Unexpected Drop in Retail Sales as Shoppers Hold Out for Deals
Retail sales across the United Kingdom experienced an unexpected decline in October, falling by 1.1% compared to September. This marks the first contraction since May and confounded economists who had predicted sales would remain flat.
The Office for National Statistics (ONS), which released the official figures, indicated that a key factor behind the slump was consumer behaviour. Shoppers appear to be deliberately delaying their purchases in anticipation of the upcoming Black Friday sales event.
Sector-by-Sector Breakdown Reveals Widespread Weakness
The downturn was felt across multiple retail sectors, with clothing, footwear, and textile stores suffering the most significant blow. Sales in this category plummeted by 3.3% month-on-month. This sharp decline follows a strong summer period where warm weather and major sporting events had boosted consumer spending on apparel.
Supermarkets recorded their second consecutive monthly fall, with sales decreasing by 1.1%. The online retail sector, often a bastion of growth, also retreated, posting a 1.7% drop. Furthermore, fuel sales saw a substantial decline of 2.4% in October compared to the previous month.
Budget Jitters Compound Pre-Christmas Slowdown
Beyond the wait for Black Friday deals, analysts point to growing consumer uncertainty surrounding the government's upcoming budget. Chancellor Rachel Reeves is set to present the budget next week, and the lack of clarity is dampening spending intentions.
"The uncertainty surrounding what the chancellor’s budget next week will mean for individuals is only further dampening consumer confidence and spending intentions," said Rajeev Shaunak, head of consumer at the advisory firm MHA. He added that the Christmas trading period will be critical for retailers, with early indicators suggesting continued sluggish demand.
In a revision of previous data, the ONS adjusted September's sales growth up to 0.7% from 0.5%, while August's growth was revised down to 0.5%. Despite these adjustments, the broader picture shows that overall retail sales remain 3.3% below their pre-pandemic level recorded in February 2020.
