Period covered: October 19Published: November 05, 2019Read time: 1min

Retail Sales Monitor

Oct 19: UK Retail Sales Monitor

Extra Promotions Release Pent-up Demand

Helen Dickinson OBE, Chief Executive, BRC: 

“Retailers embarked on an extraordinary period of discounting this October as they tried to entice shoppers into making purchases. Fashion shops were particularly active, helping non-food return to growth for the first time since July. Unfortunately, the longer term trend remains bleak with the 12 month average sales growth falling to a new low of just 0.1%. With Brexit still unresolved and a December election creating new uncertainties, retailers will be looking nervously at the months ahead.

“Nonetheless, the General Election offers politicians of all parties an opportunity to protect local retail jobs, local shopping locations and the local communities they support. MPs should build on the recent Treasury Select Committee Report and commit to reforming the broken business rates system. The first step would be to scrap the so-called downwards transition, which takes £1.3bn from retailers and redistributes most of it to other industries. This in turn holds back retailers’ investment in their physical and digital offerings, and investment in the three million dedicated people who work in the industry.”

Paul Martin, Partner, UK Head of Retail, KPMG: 

“Growth of 0.1% like-for-like in October would normally be little cause for celebration, but after several disappointing months, any tiny hints of growth are most welcome. Retailers have clearly been peddling hard to win over disengaged shoppers, especially given continued Brexit uncertainty.

“Aggressive promotion to move stock has seemingly benefited fashion sales, both on the high street and online. However, the jury’s still out on whether that progress will benefit the retailers’ bottom line.

“Online sales have returned closer to normality, with a 5.1% uptick in October, but growth online remains muted. Fierce focus will be placed on the upcoming Black Friday and Cyber Monday events to kick things into better shape.

“As trading updates from key retailers makes painfully clear, the line between sales growth and profitability is wafer thin. Increased costs – in some cases including further stockpiling in anticipation of Brexit – will impact margins. It is clear that with an ongoing lack of consumer confidence there is little room to create consumer demand with slashed prices these days.”

Food & Drink sector performance, Susan Barratt, CEO, IGD: 

“October food and grocery sales weakened versus September. However, with the impact of seasonal timings starting to play a role this is likely to be only a short-term effect. Early November should see strong trading again, with Halloween, Bonfire Night and the Rugby World Cup final all providing opportunities for incremental spend.

“Shoppers’ financial confidence has remained subdued surrounding the uncertainty of how Brexit will impact their food and grocery shopping. Despite this, they were looking forward to Halloween. Indeed, one in four said they intended to buy more this Halloween compared to previous years, with 43% buying or expecting to buy products on impulse.”