Retail sales in October declined as consumers showed caution due to upcoming Budget decisions.
- Retail sales volumes decreased by 0.7% in October after a slight rise in September.
- The three-month comparison shows a 0.8% increase in retail sales from July to October.
- Online spending dropped by 1.2% in October, yet saw a 5% increase year-over-year.
- Retailers face potential cost hikes in 2025 with changes in taxes and wages.
In October, consumer spending saw a downturn as reported by the Office for National Statistics, with retail sales volumes falling by 0.7%. This marks a shift from the 0.1% increase seen in September. The concern around the Budget announcement has contributed to this decline, reflecting a cautious consumer approach to spending.
Despite the monthly decrease, an analysis of three-month data from July to October 2024 reveals a 0.8% rise in retail sales volumes. This broader view suggests that while October faced challenges, the overall trend in sales remained positive for the period.
Food stores experienced a 0.6% drop in sales volumes, an improvement from the previous month’s 1.9% fall. Online, the value of sales also decreased by 0.4%, correcting from a prior 1.4% increase. While these numbers highlight struggles in various sectors, they also underline the volatile nature of consumer spending patterns.
The online retail sector noted a decrease in spending by 1.2% in October. However, when compared to the same month last year, there is a notable increase of 5%. This year-over-year growth indicates a shift in consumer behavior towards online shopping, despite the fluctuations seen in recent months.
Kris Hamer, director of insight at the British Retail Consortium, pointed out the challenges ahead: “While October produced a positive start to the ‘golden quarter’, with year-on-year growth for the fourth month in a row, there was a monthly decline due to pre-Budget jitters from households.” Retailers are anticipating over £7 billion in additional costs in 2025 due to changes in National Insurance contributions, minimum wage increases, and new packaging taxes. This fiscal strain could lead to job losses and store closures unless the government reevaluates the forthcoming cost implications.
October’s retail downturn underscores the fragility of consumer confidence amidst looming economic changes.
