UK retailers hit by lowest non-food sales growth since records began

Pedestrians are reflected in a shop window on Oxford street in central London on May 16, 2017.
British inflation hit a 3.5-year high in April, official data showed today, owing mainly to higher airfares, but also as a weak pound raises import costs. / AFP PHOTO / Daniel Leal-Olivas        (Photo credit should read DANIEL LEAL-OLIVAS/AFP/Getty Images)

Non-food retailers have recorded their worst sales performance since records began, the British Retail Consortium reveals.

As consumers opt for outdoor experience over visits to the shops, in-store sales of non-food items rose just 0.2% in October. This is the weakest growth recorded since the BRC began measuring the category in January 2011.

Online sales of non-pood products grew 4% in October, below both the three-month and 12-month averages of 8.7% and 8.3% respectively.

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On a total basis, sales rose 0.2% in October, against a growth of 2.4% in October 2016.

This is the lowest growth since May and below the 3-month and 12-month averages of 1.7% and 1.5% respectively.

BRC chief executive Helen Dickinson said it was a “meagre month” in October for retail sales as shopping activity slumped, and warned of a tough month ahead.

“With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run up to Christmas,” the chief exec comments.

“The decline was driven by the worst performance of non-food sales since our record began in January 2011, as consumers appear to have opted for outdoor experiences and excursions during half term, over visits to the shops.

“Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious in considering what purchases they can afford. Many now face higher borrowing costs, given the rise in interest rates, which will only serve to heap further pressure onto household finances.”

Dickinson has called on Chancellor Philip Hammond to reflect on this “disappointing state of play” and deliver an Autumn Budget that “allays the risks of a further slowdown in consumer spending” by keeping down the cost of living.

Paul Martin, head of retail at KPMG, concludes: “The burning questions for retailers will be whether shoppers are holding off their purchases until Black Friday, and whether retailers can recover from this month’s poor performance to end the year on a high.”

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