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Early Christmas shopping sends UK retail sales soaring

·3-min read
Clothing stores sales volumes in October were only 0.5% below pre-pandemic levels. Photo: Reuters
Clothing stores sales volumes in October were only 0.5% below pre-pandemic levels. (Photo: Reuters)

Retail sales rose in October after five months of no growth, driven in part by Brits flocking to department stores and toy shops ahead of the holiday season.

Retail sales volumes rose by 0.8%. Volumes were 5.8% higher than their pre-pandemic February 2020 levels.

“Although sales overall are above pre-pandemic levels, it remains a mixed picture,” said ONS chief economist Grant Fitzner.

Non-food stores was the only main retail sector that saw a rise in sales volumes, increasing by 4.2% in October. This was because of growth in second-hand stores, toy stores, sports equipment stores and clothing stores.

Clothing stores sales volumes in October were only 0.5% below pre-pandemic levels, with some retailers suggesting that early Christmas trading had boosted sales.

"It’s little surprise that shoppers are prepared to splash more cash and ensure they get their hands on the latest styles given that people have been waiting to get the parties started for so long," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

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Fuel sales fell sharply on the month, by 6.4%, as they returned to more typical levels following September’s increase. volumes were 5% below their February 2020 levels

Food store sales volumes fell by 0.3%. Despite the fall, volumes were 3.4% above pre-coronavirus pandemic levels in February 2020.

The proportion of retail sales online fell to 27.3% in October 2021, its lowest proportion since March 2020 (22.5%) but still substantially higher than the 19.7% in February 2020 before the pandemic.

"There are signs Christmas has come early for retailers with many shoppers not waiting until Halloween was over before hitting stores, spooked by warnings that some gifts and toys could be in short supply this year," said Streeter.

Noting that sales volumes in second hand goods stores accounted for a big chunk of the 7.2% rise in volumes in other non-food stores, she said this showed "the squeeze on incomes is already being felt with shoppers keen to sniff out a bargain in charity shops and on auction sites."

Lynda Petherick, head of retail at Accenture UK, said: "Retailers will be hoping that consumer spending picks up as we get deeper into the ‘Golden Quarter’ amid fears that inflation, the end of furlough and rising energy prices will continue to squeeze on household spending whilst deterring people from shopping in-store."

She noted the sector is struggling to hire staff amid a tight labour market, which is exacerbating supply chain disruptions. 

"By prolonging the seasonal shopping period over several months, retailers will be hoping they can smooth out demand and manage whether they will need to scale supply up or down accordingly," she said.

"The concern for businesses will be that demand may taper off the closer we get to Christmas, therefore retailers must ensure they’re making use of all channels to help meet customers’ needs," she added.

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