Retail Sales Monitor
Retail Gets Back on Track Ahead of Christmas
Helen Dickinson OBE, Chief Executive, BRC:
Retail is getting back on track ahead of Christmas as sales grew at a faster rate than the month prior, and well above its pre-pandemic levels. As social calendars started filling up with festivities, clothing and footwear sales performed well. Meanwhile, furniture and electrical sales were held back by global logistical issues and microchip shortages. While Halloween was heavily curtailed by the pandemic last year, chocolates and children’s costumes sold a treat as families made the most of the occasion.
Some people started their Christmas shopping early with beauty advent calendars flying off the shelves and searches for Christmas items ramping up online. Retailers are doing everything they can to offer customers the choice and availability required throughout the industry’s busiest period, prioritising the food and other festive products needed to celebrate. Retailers are hopeful that demand will continue right through the golden quarter, however, there are challenges ahead with higher prices on the horizon compounded by the many increasing costs faced by consumers.
Paul Martin, UK Head of Retail, KPMG:
October provided a modest boost for the high street as total retail sales grew by 1.3% compared to last year.
Clothing and health and beauty sales continued to dominate at the tills whilst demand for home-related purchases declined further and grocers had another poor month with food and drink sales muted at 0.27%
Confident consumers are heading to physical stores to make purchases, as online sales fell yet again in October, although with penetration rates at 42% online shopping remains significantly higher than pre-Covid-19 levels.
The much reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping. Limited availability of stock has created strong pricing dynamics, which means we are unlikely to see any big discounting this Christmas, and many retailers will be hoping consumers are willing to buy the most sought after gifts at any price. With rising costs putting a strain on most retailers, they will be placing all hopes that demand remains strong as consumers plan for a bumper Christmas, shopping early for those much wanted gifts and spending more than last year when Christmas gatherings were cancelled. The main concern is now how trade will develop post-Christmas into 2022.
Food & Drink sector performance, Susan Barratt, CEO, IGD:
The food and drink sector saw another muted performance in October, with sales down versus 2020, when shoppers increasingly stocked up ahead of the second lockdown in November. Preparations for Halloween 2021 offered a slight boost to performance, though the actual day fell out of the reporting period.
IGD’s Shopper Confidence Index reached one of its lowest levels (-11) in October. Our ShopperVista research reveals 28% of shoppers now expect food to get much more expensive in the year ahead, the highest level recorded, with increasing numbers signalling that rising food, energy and petrol prices are having an impact. However, with preparations for COP26 gathering pace in October, shoppers are torn in different directions. Some 40% stated that environmental impact was important when food shopping, up from 36% in September ’21. Helping shoppers navigate through rising prices while also addressing environmental concerns will be a key challenge for the food industry.