Retail sales slip ahead of Christmas

British retail sales slowed sharply in October as cash-strapped Britons limited spending to essential items, dampening hopes that consumers will drive the economic recovery.

Hopes for a continuing pre-Christmas sales revival were dashed amid signs that consumers are still restricting spending to essentials.

In one of the worst months for the sector this year, the British Retail Consortium said October's UK retail sales were 0.1pc lower on a like-for-like basis than a year ago, ending the modest revival seen in September.

“Unfortunately it looks like the modest sales revival we saw in September was something of a false dawn,” BRC director general Stephen Robertson said.

“The disappointing figures are a reminder of the difficult economic realities many are still facing. Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying.”

The figures heighten nerves in the sector ahead of the festive period, particularly after the collapse of electricals chain Comet .

The BRC said online sales in the last three months now included the two weakest growth rates of the four years the figures have been collected as disposable incomes are squeezed and people hold off making major purchases.

But growth is also slowing as the online retail market matures and becomes an established practice with a bigger proportion of shoppers.

Clothing and footwear sales saw double-digit like-for-like growth in the first week of the month as customers bought autumn and winter collections, but faded as they were too nervous to fill their wardrobes with them.

David McCorquodale, head of retail at KPMG, said October sales figures had been like a "disappointing firework - full of promise, but eventually fizzing out with a whimper" and said winning a share of the Christmas wallet over the next two months would be just as competitive as last year.

The food and drink sector was more resilient between August and October with the three month weighted average like-for-like sales increasing 0.7pc. It was boosted by sales of pumpkin and Halloween accessories while the final weeks of the BBC's Great British Bake-Off lifted demand for cake decorations, eggs and cake mixes.

Mr McCorquodale added: "The recession may be officially over, but it will take a little longer for consumers to feel they can spend freely again. Retailers are holding less stock than a year ago and may choose to be cautious with pre-Christmas sales in order to protect margins."