Retail sales volumes are estimated to have fallen by 0.3% in October 2023, following a fall of 1.1% in September 2023, according to the Office for National Statistics (ONS).
Looking more broadly, sales volumes fell by 1.1% in the three months to October 2023 when compared with the previous three months.
The figures show that retail sales volumes in October 2023 were at their lowest level since February 2021 – when the UK was in lockdown and many shops were closed.
Automotive fuel sales volumes fell by 2% in October 2023; in the three months to October, sales volumes fell by 0.7% when compared with the previous three months, which the ONS said may have been affected by increasing fuel prices.
Food store sales volumes fell by 0.3% in October 2023, from being unchanged in September 2023. Non-food stores sales volumes fell by 0.2% in October 2023, following a 2.1% fall in September 2023. Retailers suggested that cost of living, reduced footfall and the wet weather in the second half of the month contributed to the fall.
However, online retailers have seen a slight growth, with sales volumes rising by 0.8% in October 2023 following a fall of 2.4% in September 2023.
Christmas crucial for retailers
Josh Graham, chief marketing officer at Airtime Rewards, said: “Concerns amongst retailers will be growing as the latest statistics show retail sales figures fell for the second month in a row by 0.3%. Our own transactional data shows the sectors which saw the biggest decline were restaurants and travel, particularly across hotels. With Black Friday just one week away, and Christmas next month, this isn’t the festive spirit retailers were wishing for.
“High interest rates and winter energy bills are shaking consumers’ confidence in the physical and virtual shopping aisles. In this challenging environment, retailers must be ready to up the ante when it comes to attracting and retaining their customer base. Initiatives aimed at reducing costs and demonstrating value will be vital, and it is those retailers who are capable of creating exceptional customer experiences that will emerge as champions in this shifting retail landscape.”
Mortgage costs affecting spending
Danni Hewson, AJ Bell head of financial analysis, said: “Inflation might be falling and there may have been plenty of headlines suggesting the cost-of-living crisis could finally be coming to an end, but households are still wary about spending cash.
“The question at hand is are we saving up our cash, squirrelling it away in order to make the most of those big promotional days like Black Friday, or have price pressures pushed people to rethink Christmas plans entirely?
“What is particularly interesting is the food sector. Even here spending is down but it’s where that spend has fallen which alludes to the impact rising mortgage costs are having on middle income families. Supermarkets which offer value brands and own label deals maintained a bit of growth, but speciality stores like butchers and artisan bakers saw trade drop off.”
