UK retail sales roared higher in October, as consumers stocked up ahead of national lockdowns

UK retail sales roared higher in October, as consumers stocked up ahead of national lockdowns
Retail volume sales are now 6.7% higher than they were in February, the ONS said.AP
  • UK retail sales rose 1.2% in October from September, beating expectations, the Office for National Statistics said.
  • This was the sixth consecutive month of growth that brought consumer spending back to pre-pandemic levels, the ONS said.
  • Year-on-year retail sales increased by 5.8%, as consumers started spending for Christmas shopping earlier than usual, ahead of a national lockdown that came into force weeks later.

UK retail sales rose for a sixth month in October, smashing expectations, as some consumers stocked up ahead of lockdowns and others started buying for Christmas, encouraged by stores holding early sales, the Office For National Statistics (ONS) said on Friday.

The ONS said retail sales rose by 1.2% in October compared with September, marking their sixth month of expansion. The pace was slower than September's 1.4% increase, but well above expectations for a reading of 0%.

As lockdowns took effect in parts of the country, such as Wales, along with a number of large English cities, closing non-essential stores, as well as pubs and restaurants, and consumers prepared for wider restrictions in the weeks ahead, online shopping witnessed a rise of 52.8%.
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This compares with online sales of 20.1% reported in February, highlighting the rising trend among British households for buying groceries and goods on the web. Store sales meanwhile fell by 3.3%.

The UK has been one of the worst affected by the pandemic in Europe. The death rate in Britain is the highest in the region, with over 46,000 fatalities, while the rate of infection is nearing the peaks of the spring.

Consumer confidence hit a six-month low in October, but this did not deter Brits from hitting the shops. Retail volume sales are now 6.7% higher than they were in February, the ONS said. The government's furlough scheme remained in place in Octoberand will continue until March, protecting incomes.
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In October, household goods stores rose by 3.2%, non-store retailing at 6.4%, and department stores at 3.1%, helping the overall monthly increase in retail sales.

Retail sales volumes increased by 8.9% between August and October despite lockdown restrictions coming into place across large parts of the country in October, including major cities such as Manchester, according to the agency. "The retail sector is likely to be better prepared for this lockdown than it was in March," ING economist James Smith said.
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Although most of the country will spend November - a crucial month for consumer spending, which accounts for three-quarters of total economic activity - the outlook for the retail sales in the final two months of the year is more optimistic: "We also suspect that the retail sector stands a better chance of re-opening at the start of December than hospitality," Smith said.

According to Smith, shoppers might be inclined to buy more for Christmas to treat themselves, or others, after a tough few months.

Clothing shops and fuel were the only sectors still below their pre-lockdown sales, as restrictions for non-essential stores took effect in some parts of the country last month, while fuel consumption is still struggling, given the drop in road traffic.
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UK investors were encouraged by the data. The FTSE 100 rose 0.3%, while the pound gained modestly against both the dollar and the euro. Against the euro, the pound was last up 0.1% at 89.43 pence, having recovered from an intraday low of 89.52, while against the dollar, sterling was last flat at $1.3264, having traded earlier at a low of $1.3247.

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