Retail sales Fall shoppers delay spending ahead of budget and Black Friday
Retail sales dipped in October as Wary shoppers held off buying ahead of the Chancellor’s budget and the start of the Friday black period. Sales volumes fell by 1.1%, the first realization in three months and worse than the learning economy of the roof.
The Office for National Statistics (Statistics) said the drop was driven in part by consumers deliberately holding back on spending until big discounts were available. Grant Fitzner, OS COFCE Economist, said many consumers are reported to be waiting for the black Friday deals, which start next week. October also marks the opening of the “Golden” Retail Quarter in the run-up to Christmas.
The fall reverses the 0.7% increase in sales volumes recorded in September – a revised figure from 0.5%. Although sales rose 1.1% in the three-month period and were 0.4% higher than a year earlier, spending fell across all major categories last month. Department stores were hit hard, with sales down 4.5%, while clothing and footwear fell 1.5%. Household goods fell 0.4%, and online sales fell 0.4%. Technology sales were different, boosted by the launch of the latest Apple iPhone.
Economists have warned that consumer awareness reflects growing anxiety about the upcoming budget, amid speculation about higher taxes and the impact of unlikely cuts. Rob Wood, chief economist at Pantheon Macronomics, said that Runcy’s growing approach to the budget was “optimistic. He pointed out that speculation about the income tax rate is likely to weigh on households throughout October, and political turmoil in November is expected to weigh on sentiment.”
Ruth Gregory Ruth Gregory said retailers may not like the strong last quarter they were hoping for. “A higher tax rate in the budget could block retail spending in the crucial holiday season and into next year,” he said.
Despite the soft figures in October, some analysts believe that retailers still have opportunities to capture demand. Sagar Shah, an associate partner at McKinsey & Company, said brands were preparing customized and creative campaigns for Black Friday to dispel consumer doubts. He noted a change in the sacred experience, anti-advertising formats and consumer content designed to cut “ad fatigue” and drive engagement.
Retail sales remain the most important early indicator of broader economic softening, and October’s figures provided fresh evidence of consumers’ financial recovery ahead of a tax-heavy budget.
