Retail sales showed green shoots of recovery in October as customers gear up for the Christmas season.

Christmas shoppers in high street

Total sales inched up 1.3% in October compared to the same month in 2020 according to the BRC-KPMG Retail Sales Monitor, up 6.3% on a two-year basis.

This figure remained below the 3-month average growth of 1.7%, as well as the 12-month average growth of 10.2%.

UK retail sales dipped by 0.2% on a like-for-like basis, where they had previously increased 5.2%.

Both food and non-food sales increased 1.5% and 1.8% respectively on a total basis over the three months to October, and both categories were in growth for the month of October.

What about internet spending?

Online spending on non-food items slowed drastically by 8%, compared to a 39% increase in the lead up to the second lockdown in 2020.

online shopping

Non-food online penetration also declined to 42%, down from 48.8% the previous year. This was, however, a 10.4% rise on 2019.

BRC chief executive Helen Dickinson said: “Customer demand is getting back on track ahead of Christmas as sales grew at a faster rate than the month prior, and well above its pre-pandemic levels.

”As social calendars started filling up with festivities, clothing and footwear sales performed well. Meanwhile, furniture and electrical sales were held back by global logistical issues and microchip shortages.

“With Halloween heavily curtailed by the pandemic last year, chocolates and children’s costumes sold a treat as families made the most of the occasion.

“Some people started their Christmas shopping early with beauty advent calendars flying off the shelves and searches for Christmas items ramping up online. Retailers are doing everything they can to offer customers the choice and availability required throughout the industry’s busiest period, prioritising the food and other festive products needed to celebrate.

”Retailers are hopeful that demand will continue right through the golden quarter, however, there are challenges ahead with higher prices on the horizon compounded by the many increasing costs faced by consumers such as higher energy bills and rising national insurance.”

Few discounts this Christmas

KPMG UK head of retail Paul Martin added: “The much-reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping. Limited availability of stock has created strong pricing dynamics, which means we are unlikely to see any big discounting this Christmas, and many retailers will be hoping consumers are willing to buy the most sought-after gifts at any price.

”With rising costs putting a strain on most retailers, they will be placing all hopes that demand remains strong as consumers plan for a bumper Christmas, shopping early for those much-wanted gifts and spending more than last year when Christmas gatherings were cancelled. The main concern is now how trade will develop post-Christmas into 2022. “