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UK retailers see sales lift ahead of crucial festive season

Retail sales jumped last month, industry data showed on Tuesday, as consumers splashed out on Halloween and got festive shopping underway.
According to the latest BRC-KPMG Retail Sales Monitor, total sales grew by 1.3% in October compared to the same month a year earlier, or by 6.3% when compared to October 2019. On a like-for-like basis, retail sales were down 0.2% year-on-year.

Over the three months to October, food sales rose 0.3% on a like-for-like basis, while non-food retail sales eased 0.1%.

The best-performing sectors were clothing, footwear and jewellery and watches. Furniture and computing were two of the weakest categories, hit by supply chain issues including the semiconductor shortage.

Online penetration decreased as people returned to physical stores, falling to 42.0% in October from 48.8% in October 2020. It remains considerably higher than the 31.6% recorded in October 2019, however.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Customer demand is getting back on track ahead of Christmas, as sales grew at a faster rate than the month prior, and well above pre-pandemic levels. As social calendars started filling up with festivities, clothing and footwear sales performed well.

“With Halloween heavily curtailed by the pandemic last year, chocolates and children’s costumes sold as families made the most of the occasion.

“Some people started their Christmas shopping early, with beauty advent calendars flying off the shelves and searches for Christmas items ramping up online.

“However, there are challenges ahead, with higher prices on the horizon compounded by the many increasing costs faced by consumers.”

Paul Martin, UK head of retail at KPMG, said: “Confident consumers are heading to physical stores to make purchases, as online sales fell yet again, although online shopping remains significantly higher than pre-Covid-19 levels.

“The much-reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping. Limited availability of stock has created strong pricing dynamics, which means we are unlikely to see any big discounting this Christmas, and many retailers will be hoping consumers are willing to buy the most sought-after gifts at any price.

“The main concern is now how trade will develop post-Christmas into 2022.”

Susan Barratt, chief executive of IGD, said: “The food and drink sector saw another muted performance in October with sales down versus 2020, when shoppers increasingly stocked up head of the second lockdown in November.”

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