In a surprising turn of events, retail sales in the UK experienced a slight rebound in October, primarily driven by the fashion sector, according to the latest figures from the Office for National Statistics. The data revealed that retail sales volumes increased by 0.6% in October compared to the previous month, following a decline of 1.5% in September. However, when looking at the year-on-year figures, retail sales volumes were down by 6.1% in October.

It is important to note that the value of retail sales saw a 1.8% rise compared to the previous month and a 4.8% rise compared to the previous year. However, these gains were largely influenced by inflation-induced price increases. The decline in retail sales volumes indicates that retailers are still grappling with significant challenges.

On a monthly basis, sales volumes increased across all main sectors, except for food stores. Non-food stores saw a 1.1% rise in sales volumes, but still remained 1.7% below the levels observed before the pandemic in February 2020. Clothing stores witnessed a 2.5% increase in sales volumes compared to the previous month, but they were still 3.7% below their February 2020 levels. Department stores, however, experienced a 0.3% decrease in sales volumes.

In the online retail space, non-store retailers saw a 1.8% increase in sales volumes in October, following a decline of 2.5% in September. These sales volumes were 21.2% higher than the levels observed before the pandemic in February 2020. Online retail sales accounted for 26.1% of all retail sales since May 2022.

More specifically, online sales of textiles, clothing, and footwear dropped by 8.4% compared to the previous year and 2.7% compared to September. Similarly, department store sales online witnessed a 6.8% year-on-year decrease and a 1.7% month-on-month decrease.

Jacqui Baker, the partner and head of retail at RSM UK, expressed concerns about the upcoming winter season for retailers. She highlighted that consumers are exercising caution when it comes to spending due to the cost-of-living crisis. Despite the cost-of-living allowance introduced to offset energy price hikes, retailers are not experiencing the usual Christmas cheer. Many retailers have resorted to offering early discounts in an attempt to attract customers.

Baker also mentioned that the upcoming World Cup, Black Friday, and Christmas might provide some temporary relief for retailers. However, it remains unclear if they will be sufficient to address the challenges faced by cash-strapped retailers. Retailers are particularly relying on Black Friday to help reduce their excess stock, but with demand remaining stagnant, it may not be the solution they are hoping for.

Useful links:
BBC: October retail sales rebound in the UK, led by fashion sector
The Guardian: Online retailers drive UK retail sales as high street battles to recover