Retail sales fall in October – ONS

The Office for National Statistics said on Thursday the quantity of goods bought dropped by 0.6% on the previous month, slightly more than analysts had expected.

Commenting on the figures, Connor Campbell, senior market analyst at www.spreadex.com said: “In the post-summer, pre-Christmas lull of October, United Kingdom retail sales fell by 0.6%, worse than analysts expected and coming with the unwelcome addition of a (slight) downward revision for September’s stellar growth”.

The retail sales deflator, the measure of inflation which the ONS uses in retail data, fell 3.3 per cent in October, compared with a 3.5 per cent drop in September.

“This is likely a result of store prices continuing to fall”.

Consumers remain “the main engine of growth” and can withstand a forecast pickup in inflation next year, said Alan Clarke, an economist at Scotiabank in London.

Average shop prices, including petrol stations, were 3.3% lower in October than a year earlier. Excluding auto fuel, sales dropped -0.9% in October, more than the -0.6% predicted, and down from the prior revised increase of +1.5%. Clothing recorded a 2.3% rise in sales over the same period after prices were kept flat. “Or will retailers decide that less aggressive is needed this year due to consumers” improved purchasing power and relatively high confidence?’

“Retailers can not wholly depend on Black Friday to make a profit”.

That’s the second-weakest 12-month increase in the a year ago.

‘We’ll have to wait and see whether shoppers buy enough on Black Friday to make up for the slowdown in the weeks beforehand’.

And added: ‘In the long term, we expect retailers to increasingly adopt more personal modes of commerce’.