UK retail sales fell unexpectedly in October, dropping 1.1% month on month, the first decline since May, according to the Office for National Statistics (ONS). Economists had predicted flat growth. Supermarkets, clothing stores, and online mail order firms all reported declines, with some retailers attributing the slump to consumers delaying purchases ahead of Black Friday sales.
Clothing, footwear, and textile stores saw the largest fall, with sales down 3.3% month on month, following a strong summer boosted by warm weather and sporting events. Supermarkets recorded a 1.1% drop, their second consecutive monthly decline. Online retail sales fell 1.7%, while fuel sales decreased 2.4% in October compared with September.
Analysts also pointed to consumer uncertainty over the upcoming budget, due to be presented by Chancellor Rachel Reeves next week. Rajeev Shaunak, head of consumer at MHA, said: “The uncertainty surrounding what the chancellor’s budget next week will mean for individuals is only further dampening consumer confidence and spending intentions.”
The S&P Global flash PMI survey for November showed a slowdown in the services sector, with the index falling to 50.5 from 52.2 in October. S&P noted “heightened client caution ahead of the November budget”. Meanwhile, GfK’s consumer confidence index dropped two points to -19 in November, with all five sub-indexes falling. Neil Bellamy of GfK described the results as “bleak”, adding that “the public is bracing for difficult news”.
The ONS revised September’s retail sales growth up from 0.5% to 0.7%, but August’s growth was revised down from 0.6% to 0.5%. Overall, retail sales remain 3.3% below pre-pandemic levels from February 2020.
