Retail sales failed to pick up in October

RETAIL sales failed to revive in October as weak consumer confidence in the lead up to the comprehensive spending review undermined growth the British Retail Consortium (BRC) will say today.

The latest figures show total retail sales grew by 2.4 per cent year-on-year in October but this compared to growth of 5.9 per cent for the same period the year before.

The three-month average sales figure remained unchanged with food sales growth at four per cent for the year and non-food sales growth at 1.4 per cent.

The BRC says its consumer confidence survey showed 84 per cent of consumers think the economy is still in recession, while 26 per cent say they have no spare cash.

It will say growth in food sales last month was the result of rising commodity prices and a modest increase in overall sales. Meanwhile, continuing higher inflation meant the modest rise in non-food sales in the month was a real-terms decrease.

Clothing sales saw a decline for the first time in almost a year, while footwear sales slowed sharply after a good previous month.

Homeware sales remained tough with consumers looking for deals, especially for larger purchases while uncertainty over job cuts and income prospects ensured many gave priority to essential or replacement items over one of luxuries. Non-store sales, including internet, phone and mail order sales slowed by seven per cent, down to 12.8 per cent in October from 19.1 per cent in September.

Stephen Robertson, director general of the BRC, said: “Tough trading conditions are unlikely to change in the coming months. Retailers will be hoping those concerns are at least put on hold for Christmas.”

Helen Dickinson, head of retail at KPMG, said the slight increase on September’s figures reflected increases in shop prices rather than higher sales.

“Most retailers are not expecting a record-breaking Christmas this year but will be hoping that demand picks up a bit over the coming weeks,” she said.