The future is “bleak” for retailers despite a recent increase in sales driven by discounts, the head of the British Retail Consortium (BRC) has warned.
Sales increased by 0.6 per cent last month - the best performance since April - but growth is down compared to a rise of 1.3 per cent in October 2018.
Fashion shops were particularly active in discounting products, helping non-food return to growth for the first time since July.
Food sales also increased 0.5 per cent on a like-for-like basis and online sales of non-food products grew 5.1 per cent in October - although this was still down against a growth of 7.6 per cent the year before.
But BRC chief executive Helen Dickinson says the long-term outlook is not good.
She said: “Retailers embarked on an extraordinary period of discounting this October as they tried to entice shoppers into making purchases.
“Unfortunately, the longer term trend remains bleak... With Brexit still unresolved and a December election creating new uncertainties, retailers will be looking nervously at the months ahead.”
Ms Dickinson is now calling on MPs to “build on” the recent Treasury Select Committee Report - an inquiry that concluded the business rates system in the UK is "broken".
'The first step would be to scrap the so-called downwards transition'
Ms Dickinson said: “The General Election offers politicians of all parties an opportunity to protect local retail jobs, local shopping locations and the local communities they support.
“The first step would be to scrap the so-called downwards transition, which takes £1.3billion from retailers and redistributes most of it to other industries.
“This in turn holds back retailers’ investment in their physical and digital offerings, and investment in the three million dedicated people who work in the industry.”
Despite marginal growth for October, in-store sales of non-food items declined 3.7 per cent on a like-for-like basis - worse than the 12-month total average decline of 3.0 per cent.
Paul Martin, UK head of retail at KPMG, added: “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.”
