According to industry data, retailers faced a “disappointing” October as shoppers prepared for potential tax hikes in Rachel Reeves’s Budget.
UK retail sales rose by just 0.6% in October year-on-year, a notable drop from the 2.6% growth recorded in October 2023, as the British Retail Consortium (BRC)-KPMG Retail Sales Monitor reported.
BRC Chief Executive Helen Dickinson noted that consumers were “spooked” by pre-budget uncertainty and rising energy costs.
Linda Ellett, KPMG’s UK head of retail and leisure consumer markets, added, “Concerns over the Budget’s impact, a delay in spending ahead of Black Friday, and a later half-term break all affected last month’s retail sales.”
Food sales rose modestly, 2.9% year-on-year, compared to 7.9% growth last October, while fashion sales declined, with mild weather delaying winter purchases.
Ms. Dickinson commented, “Following a tough Budget for retailers, we hope households will feel some relief and that consumer demand will revive in time for Black Friday and the festive season.”
She also highlighted that retailers now face over £5bn in new costs from increased employer National Insurance, business rates, and a higher national living wage. “These pressures will hinder short-term investment and growth, squeezing already thin margins and raising inflation risks,” she warned.
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