The latest BRC-KPMG Retail Sales Monitor shows growth slowed in October as the mounting cost-of-living pressures curbed consumer spending.
Total sales increased by 1.6% year-on-year in October, compared to a rise of 2.2% in September. On a like-for-like basis, sales were up 1.2% compared to a 1.8% rise in September.
However, the increases are being driven by price inflation, with sales volumes dropping as consumers purchase fewer products.
The BRC suggested that some people had delayed their spending, particularly on bigger purchases, in the hope of picking up a bargain during Black Friday. Clothing and footwear declined as the mild weather meant customers held back on buying winter outfits. Meanwhile, sales of electric blankets, air fryers and other energy-efficient appliances soared as people looked to make savings on their utility bills.
Paul Martin, UK Head of Retail at KPMG, commented: “Retailers will be hedging their bets on a successful World Cup and Black Friday to boost sales during the crucial golden quarter. Given the economic headwinds, it is unlikely that the usual festive boost will be enough to counteract the ongoing issues that retailers face with rising costs, squeezed margins and falling demand. Many may feel that they have little choice but to reduce prices to hold onto customers, but with their own inflationary pressures to contend with, bumper promotions before Christmas could damage already tight margins further.
“Whilst Christmas is by no means cancelled as consumers focus on one bright spot amongst the economic clouds, retailers are facing possibly their toughest festive season in a decade as shoppers look to trade down, search out bargains and purchase less to meet the economic challenges ahead.”
Over the three months to October, food sales rose by 5.1% on a total basis or by 4.7% on a like-for-like basis. Non-food sales fell by 1.2% and 1.8% on a total and like-for-like basis respectively over the same three-month period.
