Early Christmas shopping triggers retail sales boost

Retail sales grew by 5.8 per cent year on year this October, according to ONS figures.

The statistics authority said feedback from a range of businesses suggested that consumers had started Christmas shopping earlier this year, further helped by early discounting from a range of stores.

The research also showed that retail sales volumes increased by 1.2 per cent when compared with September; the sixth consecutive month of growth in the industry, defying analysts’ predictions of a lockdown-related slump.

Growth in sales for non-store retailing was at 6.4 per cent, household goods stores at 3.2 per cent and department stores at 3.1 per cent, which all contributed to the monthly increase in sales.

Commenting on the ONS figures, Karen Johnson, head of retail & wholesale at Barclays Corporate Banking said: “There will be some head scratching at the idea of a lockdown actually increasing retail spending but that is what this latest set of sales data shows.

“Lots of people rushed to the shops over the last weekend in October as they looked to get in ahead of the national lockdown, many to get their Christmas shopping in earlier than usual, and so sales figures registered their sixth consecutive month of growth. Local restrictions also prevented people spending money on travel and leisure activities, which led to a transference of spend into the retail sector.”

Silvia Rindone, EY UK & Ireland retail partner said: “Robust retail sales in October are definitely encouraging, especially given they increased from levels seen before 2020’s first lockdown. With a national lockdown and with promotions and sales starting early this year, consumers have started Christmas shopping early. Certainly, the shift to online has been maintained – and we don’t see that changing any time soon.

“However, EY’s latest research shows UK consumers are likely to be cautious while spending this Christmas – with nearly half (47%) intending to spend less during December compared to last year, and over a quarter (27%) intending to spend less in the sales compared to last year.

“Retailers will be facing a significant increase in online purchasing over the coming weeks and operational challenges will rise to the surface. More businesses are preparing for click and collect, hoping to capture some of the sales while lockdown is still in place. Retailers therefore need to reinforce the technological and fulfilment infrastructure necessary to meet demand.”

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