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Surprise fall in retail sales

Surprise fall in retail sales
Emma Lunn
Written By:
Posted:
22/11/2024
Updated:
22/11/2024

Retail sales volumes are estimated to have fallen by 0.7% in October 2024, according to the Office for National Statistics (ONS).

This follows a rise of 0.1% in September 2024, revised down from a rise of 0.3%. However, over the year to October 2024, sales volumes rose by 2.4%.

More broadly, sales volumes rose by 0.8% in the three months to October 2024 when compared with the three months to July 2024.

The ONS said non-food store sales volumes fell on the month as retailers reported that Budget uncertainty affected sales.

The strongest sub-sector fall was within clothing stores, which fell by 3.1% over the month to October 2024. This fall follows growth in previous months attributed to end of season sales and improved weather.

Online spending fell by 1.2% during October 2024, but rose by 5% when compared with October 2023.

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Retail sales figures are significant because household consumption measured by the data is the largest expenditure across the UK economy.

However, the ONS noted that the reporting period for the most recent data covers the time frame from 29 September to 26 October 2024. Historically, school half terms for England and Wales typically fall within the October reporting period, but did not for October 2024, and this was not adjusted for in the seasonal adjustment.

Danni Hewson, AJ Bell’s head of financial analysis, said: “Whilst the picture had been an improving one, especially over the summer, there remain concerns that rising inflation and a tightening labour market will push consumers to tighten their purse strings again.

“It could be that people were simply keeping their powder dry, saving their pennies for the late half term or to indulge over Christmas. It could also be that unseasonably mild weather simply delayed the purchase of winter woollies, which have been needed over the past week. But with retailers like JD Sports reining back sales expectations for the year, the next crucial couple of months could prove incredibly tricky for the sector.”