Published
November 5, 2024
Two reports on Tuesday showed how UK consumer spending in general and retail spending specifically is faring as consumers start to feel more relaxed about inflation yet have been concerned about the measures that might have been in the new government’s first Budget.
But while there were encouraging signs in October (such as clothing no longer the top category to cut back on if money’s tight, more of which later) the pictures painted aren’t of boom times just yet.
The British Retail Consortium-KPMG’s UK Retail Sales Monitor, for instance, showed total retail sales up 0.6% year on year in the four week to October 27, but non-food sales down 0.1%.Â
In-store non-food sales fell 1.2% in the there months to October while online non-food sales increased by 0.4% last month.
The figures were generally lower than the three-month average and BRC chief Helen Dickinson called them “disappointing”. But she thinks November is likely to bring better news.Â
It seems that October was squeezed between a more upbeat September and — hopefully — a booming November/December.
For now though, “health and beauty sales remained buoyant, with beauty advent calendars flying off the shelves” although “fashion sales took the biggest hit as the mild weather delayed winter purchases”.
Both clothing and footwear declined, the report said.
Not that the picture is completely clearcut. You see the Barclays report, which looks at consumer spending via payment cards, talked of a small clothing spend uptick.Â
Overall Barclays said consumer spending grew only 0.7% year-on-year in October. That was less than September’s 1.2% increase and below the latest CPIH inflation rate of 2.6%.Â
But growth was “propped up” by spending on non-essential items, which climbed 2.1%, partly driven by “the recovery of retail, which recorded its third consecutive month of growth”.
Barclays said general retailers were up 5.2% – the highest growth for the category since September 2023. Spending at department stores also rose by 4.7% and clothing saw an admittedly small 1.9% hike, after growing 4.5% in September.Â
And the best news? As mentioned at the start, this came as new clothes and accessories were no longer cited as the number one cutback for shoppers limiting their spending.Â
It suggests that consumers, while still cautious, aren’t as worried about spending as they were some months back.Â
The report also included the results from Barclays’ regular and ongoing consumer surveys and the latest survey supported that more optimistic view.
It said that many shoppers are already planning ahead for Black Friday. Some 37% say they intend to shop during the sales period this year, although 45% say they prefer browsing Black Friday deals online with just 16% preferring to shop in-store. A third are hoping to buy their Christmas presents in the sales.
Interestingly 33% of shoppers also say the retail milestone is better for them now that it’s spread out over a longer period, but 39% no longer look forward to the seasonal sales as much as they used to.Â
Despite this, Black Friday spending increased 3.3% year-on-year in 2023, and has remained the busiest day for retail spending (excluding groceries) for five consecutive years.
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