Retail sales were given a boost in October as stored offered bigger discounts to tempt “disengaged” shoppers into making purchases, according to a report.
Total sales increased by 0.6 per cent year-on-year in October, marking the best performance since April, the BRC-KPMG Retail Sales Monitor said.
However, a year earlier sales had increased more strongly, lifting by 1.3 per cent year-on-year in October 2018.
On a like-for-like basis, retail sales across the UK increased by 0.1 per cent year-on-year last month – the same as a 0.1 per cent increase seen in October last year.
“Retailers embarked on an extraordinary period of discounting this October as they tried to entice shoppers into making purchases,” BRC chief executive Helen Dickinson said.
“Fashion shops were particularly active, helping non-food return to growth for the first time since July.”
She added: “With Brexit still unresolved and a December election creating new uncertainties, retailers will be looking nervously at the months ahead.”
KPMG head of UK retail Paul Martin said: “Growth of 0.1 per cent like-for-like in October would normally be little cause for celebration, but, after several disappointing months, any tiny hints of growth are most welcome.
“Retailers have clearly been peddling hard to win over disengaged shoppers, especially given continued Brexit uncertainty.
“Aggressive promotion to move stock has seemingly benefited fashion sales, both on the high street and online.
“However, the jury’s still out on whether that progress will benefit the retailers’ bottom line.”
He added: “Fierce focus will be placed on the upcoming Black Friday and Cyber Monday events to kick things into better shape.
“As trading updates from key retailers makes painfully clear, the line between sales growth and profitability is wafer-thin.
“Increased costs – in some cases including further stockpiling in anticipation of Brexit – will impact margins.”
A separate report from Barclaycard, which sees nearly half of the UK’s credit and debit card transactions, suggested retailers could be in for a challenging Christmas as only 47 per cent of people were confident they would be able to spend as much as they normally do on festivities.
Barclaycard found that a trend towards stockpiling continues, with 17 per cent of people buying everyday items in case of potential shortages.
Tinned goods top the list of stockpiled products, though household supplies such as toilet roll are becoming more popular to keep in reserve, the survey found.
“As we head into the festive period, shoppers are also feeling cautious about their finances, with many expecting to spend less than normal this Christmas,” Barclaycard director Esme Harwood said.
“It’s likely we’ll see consumers continue to seek out value – whether that’s through buying more in discount stores or snapping up bargains in the Black Friday sales.”
Content from Retail Gazette
Comments