Retailers hit by subdued October as Budget threat looms
UK retailers suffered a “subdued” October as Brits tightened their pockets ahead of what is expected to be a tax-heavy Autumn Budget.
Retail sales increased 1.6 per cent year-on-year but remained below the 12-month average of 2.1 per cent, marking the weakest growth since May.
The new data from the British Retail Consortium (BRC) and KPMG showed only non-food items purchased online managed to surpass the year average with an increase to 37.9 per cent beating the 37.1 per cent average.
BRC chief executive Helen Dickinson said: “October was a subdued month, with the weakest growth since May.”
Dickinson said “looming Budget decisions risk undermining fragile consumer confidence” with spending already dampening in the second half of the year.
In-store food sales managed to scrape back to a gain in October, up 0.1 per cent following a decline of two per cent last year.
But this still fell below the 12-month average of 0.6 per cent.
Retailers hoping for Black Friday boost
Linda Ellett, UK head of consumer, retail and leisure, KPMG, said: “October’s retail sales growth fell back compared to recent months, with online growth drying up altogether.”
Ellett said retailers were aiming at “swiftly reversing the slowdown in sales growth seen during October” with the march towards Black Friday sales and gradual springing up of Christmas displays.
Dickinson said retailers were “counting on” a “vital” Black Friday boost, which will come days after Chancellor Rachel Reeves takes to the dispatch box to deliver her second Autumn Budget.
Top retailers have sounded the alarm ahead of the Budget.
Tesco, Sainsbury’s and John Lewis, along with other UK retail heavyweights, have issued a direct warning to the Chancellor, arguing that her government’s tax policies could undermine its key promise to raise living standards.
“A business rates surtax on retail would put major stores and thousands of jobs at risk.
“The Chancellor should use the Budget to remove this threat and help curb inflation for businesses and families,” Dickinson said.