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Published on November 10th, 2021 | by The GC Team

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Retail sales show Christmas promise

October provided a modest boost for year-on-year retail sales, a respectable 1.3% rise in total sales indicating that “demand getting back on track ahead of Christmas”.

According to the BRC/KPMG retail sales monitor, the 1.3% increase was against growth of 4.9% in October 2020 – below the 3-month and 12-month average growth rates of 1.7% and 10.2% respectively – but up 6.3% compared with the same month in pre-pandemic 2019.

Like-for-like sales decreased 0.2%, however, against a 5.2% increase in October last year. This was also below both the 3- and 12-month average growth rates, which were recorded at 0.3% and 10.6% respectively.

Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Customer demand is getting back on track ahead of Christmas as sales grew at a faster rate than the month prior, and well above its pre-pandemic levels.

“As social calendars started filling up with festivities, clothing and footwear sales performed well. Meanwhile, furniture and electrical sales were held back by global logistical issues and microchip shortages.”

Over the three-months to October, Non-Food sales increased by 1.8% on a total basis but fell 0.1% on a like-for-like basis – below the 12-month total average growth of 14.9%. On a 2-year basis, sales saw growth of 7.4% for the three-month period.

Online Non-Food sales decreased by 8.0% in October, against a growth of 39.0% in October 2020, while the online penetration rate decreased to 42.0% from 48.8% respectively. While down on last year, it was up 10.4 percentage points on the 31.6% seen at the same point in 2019.

BRC’s Dickinson said: “Retailers are hopeful that demand will continue right through the golden quarter. However, there are challenges ahead with higher prices on the horizon compounded by the many increasing costs faced by consumers such as higher energy bills and rising national insurance.”

Paul Martin, UK Head of Retail at KPMG, said the much-reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping. 

He added: “Limited availability of stock has created strong pricing dynamics, which means we are unlikely to see any big discounting this Christmas, and many retailers will be hoping consumers are willing to buy the most sought-after gifts at any price. With rising costs putting a strain on most retailers, they will be placing all hopes that demand remains strong as consumers plan for a bumper Christmas, shopping early for those much-wanted gifts and spending more than last year when Christmas gatherings were cancelled.

“The main concern is now how trade will develop post-Christmas into 2022.”

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