Retail sales slowed in October as retailers brace themselves for consumers opting for pre-loved gifts and strict budgets this Christmas to cope with soaring bills.
Retail sales during October grew by just over 1% in value year on year, driven by inflationary pressures and masking falling sales volumes as shoppers bought fewer items per visit, British Retail Consortium (BRC) figures show.
It came as separate figures from Barclaycard also showed that card spending was up 3.5% on last October – higher than September’s 1.8% but well below the 8.8% rise in consumer inflation.
The BRC-KPMG retail sales monitor for October revealed that total sales grew by 1.6% over the month, compared with 1.3% in the same period last year.
This is below the three-month average of 1.7% and the 12-month average growth of 2.7%.
Christmas will come later than last year for many and may be more gloom than glitter as families focus on making ends meet, particularly as mortgage payments rise— Helen Dickinson, British Retail Consortium
Sales across almost every category online and in store fell year on year as consumers adjust to shrinking household incomes.
Furniture, food and health products saved the day on the high street as shoppers prepared for colder days at home but online retailers saw sales decline in every category apart from furniture as consumers headed to bricks and mortar shops more frequently in search of bargains.
BRC chief executive Helen Dickinson said: “With November Black Friday sales just around the corner, many people look to be delaying spending, particularly on bigger purchases.
“Clothing and footwear, which saw stronger sales this year, declined as the mild weather meant customers held back on buying winter outfits. Meanwhile, electric blankets, air fryers and other energy-efficient appliances continued to fly off the shelves as people sought future cost savings.
“Christmas will come later than last year for many and may be more gloom than glitter as families focus on making ends meet, particularly as mortgage payments rise.”
A poll by Barclaycard found that almost half of Britons (48%) are planning to cut down on Christmas purchases, including festive activities and gifts, to save money this year.
Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, found that spending on essential items such as fuel and groceries increased 5.7% on last October, steeper than September’s 3.3% in a reflection of the impact of rising inflation.
Fuel spending rose 17.7% year on year, while supermarket shopping was up 4.6% as the cost of food continued to rise.
Consumers are adopting a restrained approach to festivities, reaching for pre-loved gifts and setting spending limits to manage their costs during this traditionally expensive time of year— Esme Harwood, Barclaycard
In response, 67% of Britons reported looking for ways to cut costs, with 48% of these shoppers paying closer attention to the prices of items they buy regularly, and the same percentage buying budget or own-brand goods over branded goods.
Some 44% are opting for cheaper “wonky” vegetables, and one in four (26%) are only buying items that are discounted or on offer.
Spending on utilities was up 36% but significantly lower than September’s 48% increase as households started receiving their discounts from the Government’s Energy Bills Support Scheme.
Barclaycard director Esme Harwood said: “Rising petrol and supermarket costs continue to bite, but Brits are spending less on energy bills as Government support kicks in and people find ways to economise at home.
“Consumers continue to swap big nights out for cosy evenings in as they reduce their discretionary spending, while health and beauty and home improvements enjoy a little boost.
“With the festive season around the corner, we’re likely to see further cutbacks as Brits rein in their Christmas spending.
“Consumers are adopting a restrained approach to festivities, reaching for pre-loved gifts and setting spending limits to manage their costs during this traditionally expensive time of year.”
