UK Retail Sales Experience Decline, Fashion Sector Faces Struggles in October
The latest data released by the Office for National Statistics (ONS) indicates that the UK retail industry is still grappling with challenges. In October, sales volumes decreased by 0.3%, following a decline of 1.1% in September. The September figure was revised from an initially projected slightly lower drop. These figures are compared on a month-on-month basis.
The report also highlights a 0.2% decrease in sales volumes for non-food stores in October. While this represents an improvement from the 2.1% decrease in September, it still raises concerns for the sector. Additionally, non-store retailing, which mainly comprises online retailers, witnessed a modest increase in sales volumes of only 0.8% after a fall of 2.4% in September.
Further analysis of the figures reveals a 2.7% year-on-year decline in volume sales, signaling further setbacks for the industry. In terms of value sales, the amount spent decreased by 0.1% compared to September. Although it shows a 2.2% increase compared to the previous year, the impact of inflation has significantly affected overall value sales.
When compared to sales in February 2020, before the onset of the Covid-19 pandemic, total sales values were found to be 16.9% higher. However, volume sales saw a decrease of 3.1%. Although this apparent increase in values may seem positive, it is crucial to consider the inflationary effects over the past almost-four years.
The ONS report also reveals that retail sales volumes in October hit their lowest level since February 2021, a time when England, Scotland, and Wales were under widespread lockdown restrictions affecting non-essential retail.
Several factors contribute to these concerning trends. Consumer caution in spending has led to reduced purchases of fuel and other items. Poor weather conditions have also kept people indoors, further impacting sales. Even food store sales experienced a decline during this period.
Sales in non-food stores reached their lowest level since March 2021. The decrease in total non-food store sales volumes can be attributed to increased living costs, reduced footfall, and adverse weather conditions.
In particular, clothing stores reported a 0.9% decrease in sales volumes in October. This decline is expected, considering the warm weather earlier in the month that dampened enthusiasm for autumn clothing and footwear. Department stores also saw a 0.1% drop, with some retailers attributing this decline to a dip in consumer confidence.
The only sub-sector that showed positive growth was the “other” non-food stores category, with sales volumes increasing by 0.8%. This increase was primarily due to a partial recovery in sales from watches and jewellery stores. However, it is important to exercise caution in interpreting this, considering the significant fall these stores experienced in September.
Online retail experienced a slight increase in sales volumes, with a 5.1% year-on-year rise. However, compared to the previous month, online sales values decreased by 1.2%. Department e-stores witnessed declines in both measures, while textile, clothing, and footwear e-stores saw an 8.8% increase in value sales compared to the previous year. Nevertheless, volumes were down by 2.5%, which can be attributed to inflation.
Overall, the UK retail industry continues to face challenges, with fashion retailers especially struggling in October. Cautious consumer spending, unfavorable weather conditions, and rising inflation have all contributed to the decline in retail sales. As uncertainties persist, it is crucial for retailers to adapt and find innovative solutions to sustain and grow their businesses.
Useful links:
1. BBC – UK Retail Sales Decline in October
2. Business News Wales – UK Retail Sales Decline and Rise in Online Shopping
