British retailers experienced a significant slowdown in sales during October as cautious consumers reined in their spending ahead of the upcoming Autumn Budget and Black Friday promotions.
Subdued October Performance
New data from the British Retail Consortium (BRC) and KPMG reveals that retail sales increased by just 1.6 per cent year-on-year during October, falling well below the 12-month average growth rate of 2.1 per cent. This represents the weakest performance since May, indicating a concerning trend for the sector.
BRC chief executive Helen Dickinson described October as "a subdued month" for retailers, with consumer confidence appearing increasingly fragile as the Budget approaches. The spending slowdown was particularly evident during the second half of the year, suggesting growing economic caution among British shoppers.
Mixed Performance Across Categories
The retail data revealed significant variations between different product categories. Only non-food items purchased online managed to exceed annual averages, recording growth of 37.9 per cent compared to the 12-month average of 37.1 per cent.
In-store food sales showed minimal improvement, scraping a 0.1 per cent gain in October following a two per cent decline during the same period last year. However, this modest recovery still fell short of the 12-month average growth of 0.6 per cent for the category.
Linda Ellett, UK head of consumer, retail and leisure at KPMG, noted that "October's retail sales growth fell back compared to recent months, with online growth drying up altogether," highlighting the broad-based nature of the slowdown.
Budget Concerns and Black Friday Hopes
Major retailers including Tesco, Sainsbury's and John Lewis have issued direct warnings to Chancellor Rachel Reeves about potential tax policies that could undermine the government's commitment to raising living standards.
Dickinson emphasised that "looming Budget decisions risk undermining fragile consumer confidence" and warned that "a business rates surtax on retail would put major stores and thousands of jobs at risk." She urged the Chancellor to use the Budget to "remove this threat and help curb inflation for businesses and families."
With the Autumn Budget scheduled just days before the crucial Black Friday sales period, retailers are counting on a vital boost from the promotional event to reverse October's disappointing performance. The gradual appearance of Christmas displays in stores indicates the sector's hope that seasonal spending will provide much-needed relief from the current slowdown.
