Retailers in Great Britain suffered a slump in sales in October as the impact of high borrowing costs and rising prices signaled a high street recession in the run-up to Christmas. Bad weather also played a part in a 2.7% year-on-year fall in retail sales that the Office for National Statistics (ONS) said hit clothing and household goods stores the hardest.
Emphasizing the severity of the downturn, the ONS said the month-on-month drop in October was 0.3%, much lower than the 0.3% rise economists polled by Reuters had forecast. Figures for September were revised down to show sales dropped by 1.1% on the month, a sharper fall than the 0.9% first estimated. Retail sales volumes in October were at their lowest level since February 2021, during the Covid-19 pandemic.
The ONS said the soaring price of petrol and diesel was another factor deterring shoppers. A fall in car use meant consumers were less likely to visit out-of-town shopping centers or nearby towns to buy high-priced items.
Food retailers reported a 7.7% increase in spending on a year ago and online retail sales were up by 6.1%, but volumes were down in both cases as inflation resulted in consumers paying more for less. The retail sales report also showed that shoppers are shunning specialist food stores in favor of supermarkets, in the cost of living squeeze. Supermarkets reported an increase in sales volumes of 0.2% in October, while specialist food stores such as butchers and bakers reported that sales volumes fell by 4.2%. Alcohol and tobacco stores were hit by a 10.4% drop in sales volumes. Feedback from these retailers suggested that consumers were buying cheaper products and prioritizing important items, the ONS said.