UK retail sales up 0.8% on like-for-like basis in October versus a year ago, 2.6% on total basis; food sales growth during last three months averaged 2%--below recent inflation levels--indicating shrinking volumes: BRC

LONDON , November 5, 2013 (press release) – UK retail sales were up 0.8% on a like-for-like basis from October 2012, when they had decreased 0.1% on the preceding year. On a total basis, sales were up 2.6%, against a 1.1% increase in October 2012.

The 3-month average total growth (2.8%) is much closer aligned to the 12-month average of 2.7%, suggesting a more sustainable level has been reached.

Food sales growth during the last three months averaged 2.0% – below recent levels of inflation – indicating shrinking volumes. Clothing experienced a decline in total sales for the first time since March, affected by unseasonably warm weather. Strong growth in Other Non-Food points to an encouraging start to the festive season.

Online sales of non-food products in the UK grew 12.1% in October versus a year earlier. The online penetration rate was 18.3% in October, the highest level ever recorded by our Monitor over 23 months.

Helen Dickinson, Director General, British Retail Consortium, said: "It's encouraging to see growth heading in the right direction again after a disappointing slowdown in September. Much of the improvement was driven by sustained demand for new games and gadgets, and there was also a strong showing for home accessories and textiles. In contrast, clothing sales fell for the first time since March, suggesting that many customers prioritised leisure and home improvements over refreshing their wardrobes until more autumnal conditions took hold.

"Consumer confidence paused in October, and while conditions remain challenging, the signs are that customers are managing their budgets well while allowing some leeway for occasional treats. Retailers will be looking to respond to this appetite for good value with a little luxury here and there in their promotions and product offerings for the Christmas period."

David McCorquodale, Head of Retail, KPMG, said: "October was another difficult month for retailers reminding us that recovery is a slow, relentless slog. Whilst the summer months hinted at increased consumer confidence, retailers will struggle to maintain a sustained sales recovery until wage growth outpaces price inflation. While confidence may lead consumers to browse, it's cash that's needed in the tills.

"The fight for market share in the food and drink space, whilst offering value for the consumer, reduced the 3-month growth figure below inflation. Clothing and footwear had a difficult month as temperatures refused to drop, whilst other non-food items such as electricals performed better, aided by the online channel.

"The next two months are vital with stock holdings, merchandising and margins being key to success. Shoppers seem reluctant to buy their gifts early and at full price and many may be delaying their purchases in the hope that retailers will discount festive goods as the big day nears. The pressure is on retailers to kick start sales, without the need to heavily discount. Christmas has always been retailers' golden goose and a good performance in the next two months will help those in the red move back to the black." - See more at: http://www.brc.org.uk/brc_news_detail.asp?id=2530#sthash.UkiycCJS.dpuf

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