Retailers continue to struggle amidst a raft of challenges
Sales in the UK retail sector fell 0.1% last month (October) according to data released on Friday by the ONS, challenging the view that the retail landscape is finally settling after a few tumultuous months.
In the last quarter, growth slowed to just 0.2% and is down 0.6% from the prior three months. This represents the weakest growth in the last 18 months and is likely the result of weary Brits continuing to spend conservatively in the wake of election and Brexit uncertainty.
All main sectors saw a slow-down in sales apart from an unexpected bump in department stores and fuel. Bucking the trend, department stores saw a rise in month-on-month growth of 2%, the largest growth since May 2018. Year on year, this sector is also showing small shoots of growth at 0.2% following five consecutive months of decline.
Anecdotal feedback suggests that an increase in promotions and even pre-Christmas deals have contributed to this more positive outlook. However, there remains an undertone of concern about projected sales in the longer-term when not buoyed by the slashed prices associated with promotional deals.
It’s possible that the impact of Black Friday is biting sales in the month of October as bargain-hungry shoppers await the massive discounts now expected in the days and weeks surrounding Black Friday itself, however we’ll have to wait until next months to understand if this relative newcomer to the British spending calendar creates the boost the sector needs
“October can be a tricky month for retailers as they firmly close down their summer sales and fully embrace their autumn/winter collections”
Online sales have continued to hold steady with a monthly increase of 0.8% and slightly more impressive year-on-year growth of 8.8%. Household goods has had a surprise growth of 6%, however a decline in online sales has been seen in both food and clothing. Overall, online now takes a 19.2% share of all sales as of October 2019, an increase of 0.2% from September and of 1% from the same period in 2018.
October can be a tricky month for retailers as they firmly close down their summer sales and fully embrace their autumn/winter collections. And of course, Black Friday continues to throw a curveball into the more predictable spending habits we see during the earlier months of the year.
What we are definitely seeing, however, is a sector that is unrecognisable from even just a few years ago; consumers are redefining shopping habits and spending patterns and retailers are still scrabbling to keep up, let along get ahead of the game. It’s been a challenging year so far and with a December election, the outcome of Brexit still unclear and the threat of another arctic winter, there’s plenty out there to keep consumers distracted which means retailers are going to have to work even harder for every pound as the race for Christmas spending begins.
Read the ONS Report for September
According to ONS data released today, the UK retail sector is continuing to struggle amidst political, economic and social issues causing unsure shoppers to hold on to their cash.
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