Britain’s retailers experienced a drop in sales last month, according to industry figures that suggest shoppers are putting off spending in anticipation of the discounts on Black Friday at the end of November.
The British Retail Consortium also said that with Halloween falling on a Saturday this year fewer people went shopping on that key day for the sector. Retail sales in October were down 0.2% on a like-for-like basis compared with the same month last year, according to the BRC’s monthly retail sales monitor. The drop marked a change in fortunes after a sharp 2.6% rise in annual sales in September – although those figures were distorted by the timing of the end of summer bank holiday.
The rise of the US-inspired Black Friday has changed the way UK households do their Christmas shopping. The event, which falls on 27 November this year, has led to heavy discounting on electronic and electrical goods. Fashion retailers have also started offering price cuts on the day, which follows Thanksgiving in the US in an effort to get people shopping again after the holiday.
The BRC said the prospect of Black Friday deals had depressed sales of small household appliances last month.
“October was a somewhat disappointing month overall for retailers,” its chief executive, Helen Dickinson, said.
“A number of categories which we would typically expect to be popular on Black Friday saw a slowdown in October, suggesting that some shoppers may be holding out in the hope of some great deals at the end of November.
“Furniture had a good month, however, probably boosted by higher disposable incomes. Clothing also did well last month, driven by mid-season sales. However this may be to the detriment of retailers’ profit margins.”
Grocers continued to face pressure on margins from price cuts and were also hurt by England’s early exit from the Rugby World Cup, which was seen to have affected alcohol sales.
Food falls again
Food sales, which the BRC reports for the latest three months, were down 1.1% in like-for like terms from the same three months in 2014, continuing a declining pattern. Market researchers IGD, which compiled the food figures for BRC, said consumers were keeping a tight hold on the purse strings despite an improvement in household incomes.
“Deflation continues to dampen down the figures which is good news for shoppers, even though most view it as a short-term windfall,” said IGD’s chief executive, Joanne Denney-Finch.
“Our research shows only one in 10 shoppers expect food prices to fall again in the coming year. This cautious mood helps explain why the combination of rising incomes and falling prices has triggered only a modest amount of trading up on food and drink so far. However, this could change as we enter the crucial Christmas trading phase.”
