Is there a Christmas retail rush on the way?

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Retail sales in October saw only a small increase on the previous year, with more consumers becoming wary of spending due to the build-up of Black Friday in November. 

This is according to the British Retail Consortium/KPMG Retail Sales Monitor for October.  

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In October, UK retail sales increased by 0.1% on a like-for-like basis from this month last year, when they had declined by 1.0%.  

On a total basis, sales increased 1.3% against an increase of 0.2% in October 2017. This is above the three-month average of 1.1%, but below the 12-month average of 1.4%.  

Over the three-months up to October, In-store sales of non-food items decreased by 2.0% on a total basis and by 3.3% on a like-for-like basis. This is above the 13-month total average decline of 2.4%. 

Food sales increased over the three months to October by 1.2% on a like-for-like basis and by 2.3% on a total basis. This is below the 12-month total average growth of 3.5%.  

Over the same period, non-food retail sales in the UK decreased by 1.0% on a like-for-like basis and increase 0.1% on a total basis. This is above the 12-month total average decrease of 0.2%. October non-food sales experiences a growth for the first time in four months.  

Online sales of non-food products grew 7.6% in October, against an increase of 4.0% in October 2017, the lowest growth of 2017. 

This is above the three-month and 12-month averages of 6.7% and 7.4% respectively.  

British Retail Consortium chief-executive Helen Dickinson said: “Overall, retail sales growth remains low by historical standards. Sales in October saw only a slight uplift on the previous year, as cautious consumer spending continues into the final quarter of the year. 

“Brighter weather and the anticipation of better deals in the Black Friday November sales have dampened demand for discretionary purchases. Moreover, low real wage growth over an extended period has left consumers with less money in their pocket, squeezing retailers’ margins in the face of higher costs.

“Furthermore, the very real possibility of a no-deal Brexit presents a huge challenge for retailers who must contend with the prospect of higher import prices, and further drops to consumer demand. Time is running out and it is essential that the Government, the EU and the UK Parliament come to an agreement on the backstop and delivers a Brexit deal detail which gives confidence to both consumers and retailers, and avoids squeezing real wages further.” 

KPMG head of retail Paul Martin said: “October kicks off the all-important golden quarter, with some retailers earning the majority of their annual profits in these months alone. But with October’s like-for-like sales flat lining at 0.1%, it was a bit of a non-starter. 

“Demand was mainly dampened by continued economic uncertainty, as well as the anticipation for the deep discounting ahead – especially now that Black Friday weekend has become such a permanent feature. 

“Grocery sales – which have been a ray of light – actually showed signs of restraint. However, clothing sales were more promising, with the colder weather towards the end of the month prompting a wardrobe rethink. 

“The Budget highlighted efforts to relieve some of the pressures on the high street, but didn’t go far enough to address the concerns of many retailers. With the potential implications of a hard Brexit added to the mix, retailers now need to juggle contingency planning alongside the busiest time of year.” 

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