UK retail sales drop unexpectedly as shoppers await Black Friday and budget

Sales at UK retailers slumped unexpectedly last month as shoppers waited for Black Friday deals, and uncertainty over the upcoming budget dampened consumer confidence. Retail sales fell 1.1% month on month in October, the first fall since May, according to official figures from the Office for National Statistics (ONS). Economists had been expecting sales growth to be flat on the previous month. Supermarkets, clothing stores and online mail order companies suffered sales declines, which some retailers said was due to consumers delaying purchases in the run-up to the annual Black Friday sales, according to the ONS. Related: UK is worst-performing market for JD Sports as youth unemployment hits sales Clothing, footwear and textile stores posted a 3.3% month-on-month drop in sales, the largest fall, after strong summer when shoppers were motivated to buy clothes during warm weather and sporting events improved consumers’ mood. Supermarkets recorded a sales decrease of 1.1% in October, the second consecutive monthly fall. Online retail sales fell 1.7% month on month, while fuel sales dropped 2.4% in October compared with September. Some analysts also attributed the surprise fall in sales in October to consumer jitters over the upcoming budget, which the chancellor, Rachel Reeves, will present next week. “The uncertainty surrounding what the chancellor’s budget next week will mean for individuals is only further dampening consumer confidence and spending intentions,” said Rajeev Shaunak, the head of consumer at the accountancy and advisory firm MHA. “The Christmas trading period will be critical, and early sales indicators are expected to confirm that consumer demand remains sluggish, creating a perfect storm for retailers.” On Friday, the research company GfK released data showing that consumer confidence has fallen on every measure of its index this month. GFK’s five sub-indexes record public opinion about people’s personal financial situation, propensity to make big purchases and the UK’s general economic situation. The company recorded drops across all five sub-indexes compared with October, resulting in a two-point fall in overall confidence to -19. The latest monthly survey, which dates back to 1974, showed particular anxiety among earners on salaries between £35,000 and £49,999, with substantial falls in their expectations for their own financial situation and future spending. “This is a bleak set of results as we head towards next week’s budget,” said Neil Bellamy, the consumer insights director at GfK. “The public is bracing for difficult news, with little in the current climate to lift expectations.” The ONS revised retail sales for September up from 0.5% to 0.7%, but said August had been revised down from 0.6% to 0.5% growth. Overall, retail sales remain 3.3% down compared with their pre-pandemic level from February 2020.