UK Oct retail sales down 0.8%
Consumers cut back on food and clothing as inflation bites
By CFOWorld.co.uk staff | CFO UK | Published 10:59, 15 November 12
UK retail sales volumes fell 0.8 percent in October following a rise of 0.5 percent in September, the Office for National Statistics (ONS) said on Thursday.
The dip in retail sales was attributed in large parts to food stores reporting the biggest monthly sales volume decline since November 2011. However, on an annualised basis, retail sales were up 0.6 percent over October 2011.
While food stores reported the biggest monthly decline in nearly a year, sales of clothes and shoes also plummeted 2.3 percent on the month. Additionally, the three-month over three-month growth rate moderated to a mere 0.2 percent in October from 0.9 percent in September.
Additionally, the year-over-year increase in the retail sales deflator rose to 0.9 percent in October from 0.7 percent in September and a near three-year low of 0.2 percent in August. This provided further evidence that inflationary pressures were currently picking up as confirmed by the Bank of England on Wednesday.
Faced with rising inflation, customers were also likely to limit the upside for personal expenditure for some time to come as many consumers may feel the need to deleverage, opined Howard Archer, chief UK economist at IHS Global Insight.
“Furthermore, serious concerns and uncertainties persist over the domestic and global (particularly Eurozone) economic outlook. Indeed, consumer confidence disappointingly relapsed to a six-month low in October after edging up to a 15-month high in September,” he added.
However, there is some positivity around. For instance, car manufacturing lobby SMMT said car sales in October and over the first 10 months of 2012 benefitted from a marked pick-up in demand from private buyers. Specifically, private car sales rose 23.9 percent year-over-year in October to 68,191 units, it added.
Additionally, an October survey by the business lobby group CBI, which is due to hold its annual conference on Monday, reported that retailers expected a pick-up in November sales.
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