Retail sales volumes have fallen for the second month in a row — slumping to their lowest level since 2021— as consumers continued to feel the impact of inflation, Office for National Statistics (ONS) data showed.
Sales volumes fell 0.3 per cent month-on-month in October and 2.7 per cent year-on-year.
However, consumers are spending more. While sales volumes fell, retail sales values (the amount spent at the till) rose 2.2 per cent month-on-month and 16.9 per cent compared to the same period last year.
Consumer budgets have been eroded by inflation, which has pushed up the cost of everything from pasta to online deliveries.
Compared to their pre-pandemic level in February 2020, total retail sales were 16.9 per cent higher in value terms, but volumes were 3.1 per cent lower.
This left sales volumes at their lowest level since February 2021.
Heather Bovill, deputy director for Surveys and Economic Indicators at the ONS, said: “Retail sales fell again in October to their lowest level since February 2021 when widespread lockdown restrictions were in place.”
“After rebounding in September, fuel sales dipped with increasing prices discouraging customers, while food sales also dropped as consumers prioritised essential goods.”
“It was another poor month for household goods and clothes stores with these retailers reporting that cost-of-living pressures, reduced footfall and poor weather hit them hard.”
Recent figures from the British Retail Consortium (BRC) suggested the pressure on consumers’ finances have started to ease with the rate of food inflation falling to 9.9 per cent in September, down from 11.5 per cent the prior month.
Danni Hewson, AJ Bell head of financial analysis, said despite falling inflation, the figures suggest “households are still wary about spending cash.”
“These numbers are particularly concerning for retailers because this isn’t February 2021, these numbers were for the month of October when consumers traditionally begin their Christmas shopping.
“The question at hand is are we saving up our cash, squirrelling it away in order to make the most of those big promotional days like Black Friday, or have price pressures pushed people to rethink Christmas plans entirely?
“What is particularly interesting is the food sector. Even here spending is down but it’s where that spend has fallen which alludes to the impact rising mortgage costs are having on middle income families.