Retail sales picked up in October as consumers started their Christmas shopping early, apparently shrugging off concerns about rising inflation.
The Retail Sales Monitor from the British Retail Consortium (BRC) and KPMG showed that retail sales rose by 1.3% in October from the same month a year ago, an improvement on the 0.6% increase seen in September.
Clothing and health and beauty sales performed well as consumers shopped for social events as part of the festive season, while global supply chain problems and computer chip shortages held back sales of furniture and electrical items.
“Some people started their Christmas shopping early with beauty advent calendars flying off the shelves and searches for Christmas items ramping up online,” said BRC chief executive Helen Dickinson.
Online sales fell again in October, down 8%, as consumers returned to physical stores.
So far, rising prices do not seem to have not curtailed consumer spending.
“The much reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping,” said Paul Martin, UK Head of Retail at KPMG.
“The main concern is now how trade will develop post-Christmas into 2022.”
A separate survey from Barclaycard, which also includes spending on leisure activities, showed consumer spending rising 14.2% in October compared with the same month in pre-pandemic 2019, driven by entertainment, digital subscriptions and travel.
Cinema bookings rose by 17.3%, the highest level of growth since October 2019, largely due to the launch of the new James Bond film ‘No Time to Die’, Barclaycard said.
International travel recorded its strongest performance since before the pandemic began, as restrictions on travel eased.
But shortages continue to worry shoppers, with 34% of those taking part in the Barclaycard survey saying they are changing their approach to Christmas shopping this year because they are concerned that there may be limited availability of certain items.
Over half of these consumers are buying Christmas gifts earlier than usual, including toys and other child-related items, according to the survey.
Jose Carvalho, Head of Consumer Products at Barclaycard, said: “The expensive festive period on the horizon, combined with ongoing concerns around the impact of inflation and supply chain shortages, has meant we’ve seen steady yet cautious spending from consumers in October.
“While the uncertainty around rising household bills appears to be weighing on Brits’ minds, the encouraging growth we’ve seen in entertainment and international travel shows that consumers are still keen to enjoy leisure activities and holidays. As the nation continues its Christmas shopping and gears up for Black Friday and other sales, we’re confident that November should bring some welcome cheer to retailers.”