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| UK retail sales fall year on year for first time since 2013 | UK retail sales fall year on year for first time since 2013 |
| (2 months later) | |
| Rising food prices and economic uncertainty are making shoppers cautious about spending, say analysts | |
| Phillip Inman | |
| Thu 16 Nov 2017 10.59 GMT | |
| Last modified on Sat 2 Dec 2017 17.49 GMT | |
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| Rocketing food inflation and uncertainty about the outlook for the UK economy have sent retail sales tumbling to their first year-on-year fall since 2013. | Rocketing food inflation and uncertainty about the outlook for the UK economy have sent retail sales tumbling to their first year-on-year fall since 2013. |
| Food prices, which were 3.5% higher than a year earlier, helped push the volume of goods bought in shops and online down by 0.3% from October 2016. | Food prices, which were 3.5% higher than a year earlier, helped push the volume of goods bought in shops and online down by 0.3% from October 2016. |
| The month-on-month figure was more upbeat after it showed a 0.3% increase on the previous month following strong sales in charity shops, auction houses, antiques and fine art dealers, the Office for National Statistics said. | The month-on-month figure was more upbeat after it showed a 0.3% increase on the previous month following strong sales in charity shops, auction houses, antiques and fine art dealers, the Office for National Statistics said. |
| But this monthly increase failed to make up for September’s 0.7% slump from August and lacklustre spending over much of the year. | But this monthly increase failed to make up for September’s 0.7% slump from August and lacklustre spending over much of the year. |
| Kate Davies, a senior statistician at the ONS, said there was an “underlying picture of steady growth in retail sales”, though second-hand goods were the main reason for October’s month-on-month rise. | Kate Davies, a senior statistician at the ONS, said there was an “underlying picture of steady growth in retail sales”, though second-hand goods were the main reason for October’s month-on-month rise. |
| The value and volume of goods bought in October compared with the previous month increased by only 0.1% after fuel was stripped out of the figures, indicating the strength of petrol purchases ahead of price rises seen this month. | The value and volume of goods bought in October compared with the previous month increased by only 0.1% after fuel was stripped out of the figures, indicating the strength of petrol purchases ahead of price rises seen this month. |
| Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said: “Retail sales volumes recovered only partially from September’s 0.7% month-on-month drop, underlining that consumers have adopted a cautious mindset. | Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said: “Retail sales volumes recovered only partially from September’s 0.7% month-on-month drop, underlining that consumers have adopted a cautious mindset. |
| “Admittedly, surveys had pointed to a further fall in sales in October, but sales of motor fuel and at ‘other’ stores – which the surveys cover poorly – jumped by 2.0% and 3.1% respectively. The rise in motor fuel sales likely will be reversed immediately in November, as pump prices respond to the recent surge in oil prices,” he said. | “Admittedly, surveys had pointed to a further fall in sales in October, but sales of motor fuel and at ‘other’ stores – which the surveys cover poorly – jumped by 2.0% and 3.1% respectively. The rise in motor fuel sales likely will be reversed immediately in November, as pump prices respond to the recent surge in oil prices,” he said. |
| Analysts have pointed to the recent mild weather as a dampener on winter clothes sales and food inflation, which hit 4% month on month, as important elements depressing retail sales. | Analysts have pointed to the recent mild weather as a dampener on winter clothes sales and food inflation, which hit 4% month on month, as important elements depressing retail sales. |
| A survey by credit card provider Visa found that consumer spending shrank by 2% in October, the fastest year-on-year decline in four years and the fifth monthly decline in six months. The report said the fall was driven by a 5% decline in spending on the high street. | A survey by credit card provider Visa found that consumer spending shrank by 2% in October, the fastest year-on-year decline in four years and the fifth monthly decline in six months. The report said the fall was driven by a 5% decline in spending on the high street. |
| The CBI said following its survey of retailers that 50% suffered declining sales in October, while only 15% benefited from an increase, leaving a rounded balance of -36%, the lowest since March 2009. | The CBI said following its survey of retailers that 50% suffered declining sales in October, while only 15% benefited from an increase, leaving a rounded balance of -36%, the lowest since March 2009. |
| Anxiety about the the economic outlook, which is reflected in recent consumer confidence surveys, has also deterred shoppers from buying big-ticket items such as furniture. | Anxiety about the the economic outlook, which is reflected in recent consumer confidence surveys, has also deterred shoppers from buying big-ticket items such as furniture. |
| Keith Richardson, a retail sector spokesman for Lloyds Bank, said: “Warmer than expected weather left retailers feeling cold in October as families chose not to spend half term shopping for new coats or winter warmers. | Keith Richardson, a retail sector spokesman for Lloyds Bank, said: “Warmer than expected weather left retailers feeling cold in October as families chose not to spend half term shopping for new coats or winter warmers. |
| “When the Bank of England raised interest rates for the first time in a decade, it said it believed the economy was strong and that the consumer had already borne the worst of the squeeze on incomes. | “When the Bank of England raised interest rates for the first time in a decade, it said it believed the economy was strong and that the consumer had already borne the worst of the squeeze on incomes. |
| “Retailers will definitely be hoping that they are right. These figures show that shoppers were already tightening their belts before the rate rise.” | “Retailers will definitely be hoping that they are right. These figures show that shoppers were already tightening their belts before the rate rise.” |
| •Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here. | •Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here. |
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