Weak October retail sales bode ill for Christmas - BRC

By @ibtimes on

LONDON Retail sales softened in October as careful shoppers kept their purses shut and cut back on non-food items, the British Retail Consortium said on Tuesday.

Like-for-like retail sales values were 0.6 percent lower compared to October 2010. The value of total sales was 1.5 percent higher, though this still points to falling sales in real terms as inflation stood at 5.2 percent in September.

The figures come after data in September showed like-for-like sales rose 0.3 percent, giving a rare glimmer of hope to shopkeepers among a raft of gloomy news.

Which part of the wave we're riding varies from month to month but the water is consistently chilly, said Stephen Robertson, director general at BRC.

This is evidence of the basic weakness of consumer confidence and demand and worrying this close to Christmas.

Consumers have struggled in the face of higher taxes, rising unemployment and wage increases failing to keep up with inflation as the economy teeters on the brink of recession.

The three-month weighted average showed that food sales were up 1.8 percent on a like-for-like basis between August to October compared to the same period in 2010 but non-food sales were down 1.8 percent.

The beginning of the month continued with the trend we saw at the end of September: the warm weather helped to boost food sales to the detriment of clothing and other non-food sectors, said Helen Dickinson, head of retail at KPMG, which collects the survey data.

Household spending remained subdued at the start of the current quarter, with a slight reduction in October from the previous month, Visa Europe's UK Expenditure Index, also published on Tuesday, showed.

The index, which includes a broader range of expenditure such as spending in restaurants or for culture, showed spending fell 0.9 percent on the month and 1.9 percent on the year in October.

The index is adjusted to create a like-for-like comparison and is based on all Visa card transactions, which account for a quarter of UK spending.(Reporting by Jonathan Cable; Editing by Hugh Lawson)

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