The key questions posed after the figures is whether or not client confidence has collapsed or are we, in actual fact, saving up for the Christmas season forward?
By James Sillars, Business reporter @SkyNewsBiz
Retail sales took an sudden fall final month, based on official figures suggesting a droop to COVID lockdown ranges with solely on-line operators seeing progress.
The Office for National Statistics (ONS) reported a 0.3% decline general in October 2023, following a fall of 1.1% in September.
An increase in volumes of 0.3% had been anticipated by economists.
Sales fell 1.1% within the three months to October compared with the earlier three months, the ONS added.
Its deputy director for surveys and financial indicators, Heather Bovill, mentioned: “Retail sales fell once more in October to their lowest stage since February 2021 when widespread lockdown restrictions had been in place.
“After rebounding in September, gas sales dipped with growing costs discouraging prospects, whereas meals sales additionally dropped as shoppers prioritised important items.
“It was one other poor month for family items and garments shops with these retailers reporting that cost-of-living pressures, decreased footfall and poor weather hit them exhausting.
“However, it was a greater month for on-line retailers, the one essential sector to report progress in October.”
Their volumes had been 0.8% larger on the earlier month, the information confirmed.
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Of the remainder, the sharpest decline, of 2%, was felt by gas retailers.
Households nonetheless have good cause to be cautious given the squeeze on their funds from power, meals, mortgages and rents.
Consumer spending accounts for 60% of the UK economic system and any declines will make worrying studying for these involved that the UK economic system is in danger of recession – that is two consecutive quarters of unfavourable progress.
Zero progress for the third quarter of the 12 months, in an preliminary studying, stays in danger of being revised down.
But there are economists and business specialists who consider that customers are usually not extensively in unhealthy form and many have been saving as much as enable for higher spending in the course of the festive season.
Pantheon Macroeconomics mentioned of the information: “The further fall in retail sales in October, which left sales 3.9% below their 2022 average level, likely will be reversed in the coming months, due to robust growth in households’ real disposable incomes.”
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The first check of that principle might be Black Friday, which might ship a lift to progress prospects within the present fourth quarter.
Deann Evans, managing director for Europe at ecommerce platform Shopify, mentioned: “Retailers could be forgiven for anticipating a troublesome vacation buying season, with the newest ONS figures exhibiting a continued slowdown in British retail sales.
“But our information recommend that many consumers have used latest months tactically to avoid wasting in preparation for the vacation season.
“In fact, over half (53%) of UK shoppers have been putting aside more money each month than they have in previous years.”