Cautious consumers impact retail sales amid continued inflation

New figures published by the British Retail Consortium (BRC) have found that high inflation is continuing to impact sales across the UK, as cautious consumers pull back on spending ahead of the holiday season.

Over the four weeks from October 1 to 28, the region’s total retail sales had increased 2.5 percent, up from the previous year’s 1.6 percent but operating below the three-month average growth of 3.1 percent.

Non-food sales fell 1 percent over the three months to October, with in-store sales dropping 0.1 percent while online sales decreased 2.5 percent during the month.

Chief executive of the BRC, Helen Dickinson, linked the decline in sales to rising mortgage and rental costs, as well as consumers putting off purchases in the hopes of saving money during the upcoming Black Friday sales.

Dickinson did note that the final arrival of colder weather had helped to boost fashion sales, particularly in the outdoor wear category.

In a release, Paul Martin, UK head of retail for KPMG, further added: “Although the retail sector has done some sterling work around controlling their own cost environment, the health of the industry is at the mercy of macro demand.

“Retailers are facing a challenging Christmas, competing for a shrinking share of wallet, driven by promotions that will no doubt cut into already stretched margins. With spending levels expected to be much more muted this year, the run up to Christmas could be the most challenging we’ve seen since pre-pandemic days.”