Retail Sales In Great Britain Below Pre-Pandemic Levels As Shoppers Cut Costs

Fall of 2.4% in the quarter to October is the worst quarterly performance since March last

Retail sales in Great Britain plunged in the quarter to October as the pressure of inflation hitting a 41-year high and surging energy prices pushed households to slash budgets and limit spending.

The Office for National Statistics (ONS) said retail sales dropped by 2.4% in the quarter in comparison to the previous three months, with volumes in September and October dropping below pre-pandemic levels for the first time.

It is the most terrible quarterly sales performance since March 2021, when coronavirus curbs hit retailers, and shows the significant fall in spending as the UK goes into recession.

Month on month, retail sales surged by 0.6% last month but the ONS warned this was likely to suggest a rebound from the previous month, when sales dropped 1.5% because many shops closed on the day of the Queen’s funeral.

Darren Morgan, an ONS director of economic statistics, said:

“Looking at the broader picture, retail sales continue their downward trend seen since summer 2021 and are below where they were pre-pandemic.”

According to the most recent data, food store sales slumped 1% last month, and remain 4.1% below their pre-pandemic levels, as budget-conscious consumers reduced spending amid rising price hikes and the cost of living crisis.

The figures come as chancellor Jeremy Hunt’s austerity budget on Thursday caused the Office for Budget Responsibility, the government spending watchdog, to say people in Britain are facing the greatest drop in living standards since records started.

Sales volumes for household goods stores dropped by 4% in October and remain nearly 12% below pre-pandemic levels, with consumers continuing to forgo spending on big-ticket items such as furniture.

However, non-food store sales surged by 1.1% month on month last month but remain 1.7% below pre-pandemic levels, prompted by storing growth in secondhand goods stores and auction house sales as consumers increasingly scour around for bargains.

Clothing store sales volumes increased by 2.5% in October but remain 3.7% below February 2020 levels, while department store sales volumes dropped by 0.3% month on month last month.

“Rising retail sales [in October] continue to mask a fall in volumes, as inflation continued to inflict pain on retailers and consumers alike,” said Helen Dickinson, the chief executive of the British Retail Consortium.

“There were drops in purchases of household electricals, while key goods such as pharmaceuticals and footwear held up slightly better. Consumer confidence improved slightly as the political turmoil of recent months began to abate. Retailers are hoping sales will pick up a little as the World Cup and festive season approaches but there is little chance of them catching up with current double-digit inflation.”