UK retail sales fall 0.6%

Th

e latest BRC-KPMG Retail Sales monitor has shown that UK retail sales values were down 0.6% on a like-for-like basis in October compared to October 2010 when sales had risen 0.8%. Total sales were up 1.5% compared to a 2.4% increase

in October 2010.

Sales slowed with big-ticket items suffering most. Sales of clothing and footwear were affected by the unseasonably mild weather and sales of homewares continued to be slow and often deal-driven.

Internet, mail-order and phone sales returned to growth during the month after falling back in September. Sales were 11.5% up on a year ago, more than the 10.1% in September but less than in August and than the 12.8% in October 2010.

Stephen Robertson, director general, British Retail Consortium, said: "For a fifth month, total sales growth continues its strangely regular flip-flopping between 2.5% and 1.5%. But, the year-to-date figure, which smooths out these minor moves, is unchanged from the previous month. This is evidence of the basic weakness of consumer confidence and demand and worrying this close to Christmas.

"Underneath the headline figure, the year-to-date results show almost no growth in non-food sales. Allowing for the VAT rise since last year,that suggests a substantial drop in sales volumes while the food figures indicate very little volume growth. It's clear customers are cutting back whatever they're buying.

"A lasting lift in consumers' mood needs a sense that better times will come for jobs, costs and incomes. The Chancellor should use this month's Autumn Statement to help customers and businesses by offering hope over next year's planned fuel duty and business rates increases."

Helen Dickinson, head of retail, KPMG, said: "The month overall saw ongoing challenges for big-ticket items and continued high levels of volatility across individual weeks and different sectors.

"But one constant remains: to whatever extent sales are being made, margins and hence profits are being impacted to stimulate demand as retailers strive to cope with the new reality. The success of the Christmas season for retailers hangs in the balance as October's results do not set a strong foundation."

Images: Sale