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Retailers see worst non-food sales growth since records began

Laura  Barnes
Retailers see worst non-food sales growth since records began

The latest BRC – KMPG retail sales monitor has revealed that throughout October, sales of non-food items grew at the slowest pace since records began.

In October, UK retail sales decreased by 1.0% on a like-for-like basis from October 2016, when they had increased 1.7% from the preceding year.

On a total basis, sales rose 0.2% in October, against a growth of 2.4% in October 2016. This is the lowest growth since May and below the 3-month and 12-month averages of 1.7% and 1.5% respectively.

Over the three months to October 2017, in-store sales of non-food items declined 2.2% on a total basis and 2.9% on a like-for-like basis. On a 12-month basis, the total decline was 2.1%, the deepest since BRC’s records began in January 2011.
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“It was a meagre month in October for retail sales as shopping activity slumped. With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run up to Christmas,” said Helen Dickinson OBE, chief executive, British Retail Consortium (BRC).

“The decline was driven by the worst performance of non-food sales since our record began in January 2011, as consumers appear to have opted for outdoor experiences and excursions during half term, over visits to the shops. The growth in food sales meanwhile, adds some colour to this otherwise anaemic picture, but these figures are very much buoyed by inflation.

“Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious in considering what purchases they can afford. Many now face higher borrowing costs, given the rise in interest rates, which will only serve to heap further pressure onto household finances.

Dickinson continued: “Considering the intrinsic link between consumer spending and economic growth, the Chancellor should reflect on this disappointing state of play and deliver a Budget that allays the risks of a further slowdown in consumer spending, by keeping down the cost of living. In other words, a shoppers Budget.”

Paul Martin, head of retail, KPMG, added: “October marked yet another reversal of fortunes for retailers, reinforcing just how volatile consumer spend has been. Despite the positive picture last month, these latest figures will be a real disappointment and not the start to the golden quarter retailers had hoped for.”

Tags: Retail , kpmg , brc

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