Published on November 5th, 2019 | by The GC Team0
“Extraordinary” discounting brings small increase in October sales
Retailers cutting prices to entice shoppers into making purchases brought a slight lift in sales during October, but the longer-term trend remains depressed, with figures showing the 12-month average sales growth falling to a new low of just 0.1%.
According to Helen Dickinson, Chief Executive of the British Retail Consortium, October represented “an extraordinary period of discounting”.
Overall retail sales increased by 0.6%, against a rise of 1.3% in October 2018, while like-for-like growth increased by 0.1%.
Sales of non-food items for the three months to October decreased 1.9% on a like-for-like and 1.8% on a total basis, with in-store sales declining 3.7% and 3.6% respectively and online sales of non-food products growing 5.1%, down from 7.6% growth in October 2018.
Paul Martin, UK Head of Retail at KPMG, said: “Growth of 0.1% 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.
“Online sales have returned closer to normality, with a 5.1% uptick in October, but growth online remains muted. 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.
“It is clear that with an ongoing lack of consumer confidence there is little room to create consumer demand with slashed prices these days.”