The latest report from the British Retail Consortium (BRC) reveals that retail sales growth in the UK experienced a further slowdown in October. The data indicates that high mortgage and rental costs have continued to impact consumer confidence.
According to the BRC-KPMG Retail Sales Monitor, total retail sales for the four-week period ending on October 28 increased by 2.5% compared to the previous month. However, this growth rate is lower than the three-month average of 3.1% and falls short of the 1.6% increase recorded in October of the previous year.
The report highlights that food sales remained the primary driver of growth, with a significant increase of 7.9% over the three months leading up to October. On the other hand, non-food sales experienced a further decline of 1.0%.
Despite the positive impact of cold weather on fashion sales, many consumers are choosing to delay their holiday shopping until the upcoming Black Friday sales event, according to BRC Chief Executive Helen Dickinson. She also noted that due to the cost-of-living squeeze, consumers are allocating more of their budget towards lower-priced indulgences such as beauty products.
KPMG U.K.’s head of retail, Paul Martin, explains that despite a lower inflationary environment, consumer demand is decreasing. This suggests that the financial pressures experienced by consumers over the past year have taken a significant toll on their wallets. Factors such as higher interest rates, diminishing COVID savings, and the return of heating costs are causing consumers to carefully reconsider their spending habits.
In conclusion, the latest data from the BRC indicates that retail sales growth in the UK has slowed down due to ongoing economic challenges like high costs and decreased consumer confidence. With the upcoming Black Friday sales around the corner, retailers are hoping for an uplift in demand to boost their business during these challenging times.