Retail sales in the UK experienced an unexpected decline in October, with volumes falling by 0.7%, according to the Office for National Statistics (ONS).
The drop, attributed to pre-Budget uncertainty and mild weather, marked a challenging period for the retail sector.
Clothing stores faced the steepest decline, with sales tumbling by 3.1%. Retailers have suggested that milder-than-usual weather prompted shoppers to delay purchasing winter clothing.
Speculation about potential tax increases ahead of the Budget further dampened consumer confidence, discouraging both households and businesses from making spending decisions.
Despite October’s decline, the ONS noted that retail sales volumes rose by 0.8% in the August to October period compared to the preceding three months.
However, sales remain below pre-pandemic levels, highlighting the continued challenges facing the sector.
Hannah Finselbach, senior statistician at the ONS, emphasised that while October was a difficult month, broader trends suggest retail sales are holding steady.
She pointed out that the Budget uncertainty had a noticeable impact on consumer behaviour.
The latest retail sales figures add to a series of concerning economic data. Recent reports revealed higher-than-expected government borrowing and inflation rates exceeding forecasts. Additionally, the UK economy showed minimal growth between July and September.
Retail analysts are particularly concerned as the holiday shopping season approaches. Jacqui Baker, head of retail at RSM UK, described the October figures as troubling, especially with retailers gearing up for their busiest period in the run-up to Christmas.
Baker noted that the delayed half-term and unseasonably warm weather affected sales of winter items such as coats and boots, leaving retailers with surplus stock. Many consumers also appear to be postponing purchases to take advantage of upcoming Black Friday deals.
However, Baker expressed optimism for the weeks ahead, stating that with the Budget now concluded and interest rates showing signs of easing, consumer confidence could improve, paving the way for stronger Christmas sales.
