Surprise drop in October brings UK retail sales to lowest level since pandemic

Sales volumes dipped 0.3 per cent last month, confounding predictions of a 0.4 per cent rise

Shoppers carry groceries in Slough but UK sales volumes in October were down. Bloomberg

UK retailers recorded a surprise drop in sales in October, marking the lowest level since the pandemic, latest data shows.

The Office for National Statistics said sales volumes dipped by 0.3 per cent last month, while revising September’s fall from 0.9 per cent to 1.1 per cent.

Analysts were predicting a rise of 0.4 per cent for October. The actual figure of a 0.3 per cent decline brought sales to their lowest since February 2021 when Covid-19 restrictions were in place.

Food shops said their sales had also fallen 0.3 per cent during the month, a worse result than September, but non-food stores registered a decline of 0.2 per cent in October, after sales dropped 2.1 per cent the month before.

Retailers blamed the cost of living, reduced footfall and wet weather in the second half of October.

"Retail sales fell again in October to their lowest level since February 2021, when widespread lockdown restrictions were in place," said Heather Bovill of the ONS.

"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.

"However, it was a better month for online retailers, the only main sector to report growth in October."

The ONS said while volumes – the amount sold – dropped during the month, the value of what was sold increased by 0.1 per cent.

People were paying 16.9 per cent more to buy 3.1 per cent less in October than they did in February 2020, laying bare the impact of the cost-of-living crisis.

Earlier this month, a survey from the ONS showed the rising cost of living has caused about two thirds (67 per cent) of adults in Britain to spend less on non-essentials.

Aled Patchett, head of retail and consumer goods at Lloyds Bank, said: "Another dip in sales suggests rising household costs remain at the forefront of consumers' minds, despite headline inflation easing in recent months.

"The rising cost of living remains a drag on consumers' discretionary incomes. Households continue to prioritise essential spending, particularly as falling winter temperatures push energy use up and high levels of inflation prevent material downturns in the prices of goods.

"Retailers will now be looking to strike the balance of getting staffing levels right, while also being mindful that an early sales offering might not get the tills ringing as loudly as they'd like, as consumers navigate financial challenges elsewhere."