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Published on November 7th, 2017 | by The GC Team

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Non-food retail suffers record decline in October

According to the BRC-KPMG Retail Monitor for October 2017, UK retail sales declined by 1% on a like-for-like basis compared to October 2016, and on a 12-month basis in-store non-food sales declined 2.9% like-for-like. The total decline, says the BRC, was “the deepest since our records began in January 2012.”

Online sales of non-food products grew 4.0% in October, below both the 3-month and 12-month averages of 8.7% and 8.3% respectively. “Online,” says the BRC, “it was the lowest growth since our records began in December 2012.”

Helen Dickinson OBE, Chief Executive of the BRC, says: “It was a meagre month in October for retail sales as shopping activity slumped. With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run up to Christmas.

“The decline was driven by the worst performance of non-food sales since our record began in January 2011. “Real consumer spending power has been on a downward trend in the last year as the acceleration in inflation has caused shoppers to become ever more cautious in considering what purchases they can afford. Many now face higher borrowing costs, given the rise in interest rates, which will only serve to heap further pressure onto household finances.

“Considering the intrinsic link between consumer spending and economic growth, the Chancellor should reflect on this disappointing state of play and deliver a Budget that allays the risks of a further slowdown in consumer spending, by  

Paul Martin, Head of Retail at KPMG, adds: “October marked yet another reversal of fortunes for retailers, reinforcing just how volatile consumer spend has been. The burning questions for retailers will be whether shoppers are holding off their purchases until Black Friday, and whether retailers can recover from this month’s poor performance to end the year on a high.”

Hugh Fletcher, Global Head of Consultancy and Innovation at Salmon, said: “The new figures… don’t make for good reading for retailers across the country. Companies need to ensure they retain a strong multichannel approach to sustain growth and increase sales; combining a strong ‘offline’ offering in the high street with an equally robust online approach should ease the pressure on many retailers. As consumers increasingly flock online to purchase goods, retailers should be looking to start Black Friday sales sooner rather than later to boost the slump in non-food sales, perhaps by even creating their own ‘peak days’ to stave off the competition from Black Friday stalwarts such as Amazon. The next month or so will be a game-changer for many in the retail business.”

Olga Kotsur, Co-founder and CEO at London-based retail tech start-up Mercaux, said: “Shoppers are easily influenced by factors such as weather, which are hard to predict and plan for, so ups and downs are to be expected. However, it’s not impossible – retailers can take a more strategic approach to combat such external circumstances. It’s just a case of evolving the way they work. For years now retailers have struggled to make use of the data they have, and often fail to turn it into actionable information. Where it once was ok not to make best use the data they had, in the modern day of digital commerce, it is unacceptable for retailers not to harness their data to improve their customer experience.”

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