As the cost of living for consumers continued to rise, retail sales slowed in October. According to the latest BRC-KPMG Retail Sales Monitor for October 2022, total sales increased by 1.6% in October, against an increase of 1.3% in October 2021. This is below the 3-month average of 1.7% and the 12-month average growth of 2.7%.
UK retail sales increased 1.2% on a Like-for-like basis from October 2021, when they had decreased by 0.2%. This was in line with the 3-month average growth of 1.2% and above the 12-month average growth of 1.0%.
Over the three months to October, Food sales increased 5.1% on a Total basis and 4.7% on a Like-for-like basis. Non-Food retail sales decreased by 1.2% on a Total basis and 1.8% on a like-for-like basis.
In-Store sales of Non-Food items increased 1.3% on a Total basis and 0.4% on a Like-for-like basis since October 2021. Online Non-Food sales decreased by 6.3% in October, against a decline of 8.0% in October 2021.
The Non-Food Online penetration rate decreased to 39.9% in October from 42.0% at the same point last year.
Paul Martin, UK Head of Retail | KPMG, said: “Sales across almost every category both online and in store fell year on year as consumers adjust to shrinking household incomes. Furniture, food and health products saved the day on the high street as consumers prepare for colder days at home. Online retailers saw sales decline in every category apart from furniture, as consumers head to the shops more frequently in search of bargains to manage daily expenditure.
“Retailers will be hedging their bets on a successful World Cup and Black Friday to boost sales during the crucial golden quarter. Given the economic headwinds, it is unlikely that the usual festive boost will be enough to counteract the ongoing issues that retailers face with rising costs, squeezed margins and falling demand. Many may feel that they have little choice but to reduce prices to hold onto customers but with their own inflationary pressures to contend with, bumper promotions before Christmas could damage already tight margins further. Whilst Christmas is by no means cancelled as consumers focus on one bright spot amongst the economic clouds, retailers are facing possibly their toughest festive season in a decade as shoppers look to trade down, search out bargains and purchase less to meet the economic challenges ahead.”
Helen Dickinson OBE, Chief Executive | British Retail Consortium, said: “Christmas will come later than last year for many and may be more gloom than glitter as families focus on making ends meet, particularly as mortgage payments rise. Retailers hope the World Cup and Black Friday, will give sales a much-needed boost ahead of Christmas. However, with little sign of cost pressures easing, government action is needed to support households. Retailers face an additional government imposed £800m inflationary increase in their business rates bills next year so the government should freeze rates and reform the broken transitional relief system to alleviate cost pressures that are feeding through to higher prices at a time when people are least able to afford them.”