Growth in UK retail sales slumped in October, according to industry figures that suggest shoppers have put off spending in anticipation of Black Friday promotions and because of a later school half-term break.
Figures from the British Retail Consortium show total sales grew by 0.6 percent year on year in October, significantly weaker than September’s and less than half the three-month average growth rate.
Fashion sales took the biggest hit as mild weather deterred spending on winter clothes, while industry leaders said shoppers were holding back on buying goods as they prepared to go hunting for bargains in the US-inspired Black Friday sales event.
Part of the weakness was due to a later October half-term in England for many families than in 2023. Sales are typically higher during the school holiday, but the BRC said this would be captured in its November data.
Helen Dickinson, the chief executive of the BRC, also said uncertainty before the budget and rising energy bills had “spooked” consumers. “After a good start to autumn, October’s sales growth was disappointing,” she said.
Food sales increased by 2.9 percent year on year in the three months to October, against growth of 7.9 percent in the same period in 2023. Non-food sales fell 0.1 percent amid weakness in spending on toys and baby equipment, clothing and furniture.
Separate figures from Barclays also revealed a slowdown in spending, despite consumer confidence rising significantly as households took a better view of their own financial position and the prospects for the UK economy.
The bank, which processes almost 40 percent of the UK’s credit and debit card transactions, said many shoppers were planning ahead for Black Friday. In a survey of 2,000 consumers by the market research firm Opinium on behalf of Barclays, 37 percent said they intended to shop during the sales period, while almost a third said they had already put items in an online basket so they could monitor whether those items would be discounted.
Barclays said consumer card spending grew 0.7 percent year on year, less than September’s increase of 1.2 percent, with growth propped up by spending on non-essential items and entertainment, including ticket sales for Coldplay’s world tour and digital streaming services.
Essential spending – including supermarket sales – fell by 2.2 percent year on year, the sharpest decline since the first full month of lockdown amid the onset of the Covid pandemic in April 2020.
Figures in September had shown a sharp drop in consumer confidence before Labour’s first budget since 2010, after warnings from Keir Starmer and Rachel Reeves for households and businesses to expect “painful” tax rises to help repair the government finances and fund public services.
The chancellor last week announced £40 billion of tax rises targeted at businesses and the wealthy as she gambled on voters rewarding the government for patching up Britain’s crumbling public realm.
“With clarity now provided by the budget and many households escaping paying increased tax from their wages, retailers will be hoping for an upturn in consumer confidence and spending,” said Linda Ellett, the UK head of consumer, retail and leisure at KPMG, which compiles the BRC sales monitor.
“Any positivity from retailers though will of course be dampened given the increased employment costs that they face. The promotional weeks around Black Friday will be the first real test of post-budget consumer sentiment,” she added.
By Richard Partington