Retail sales in Great Britain slumped in the three months to October as the pressure of inflation hitting a 41-year high and soaring energy prices forced households to cut budgets and dramatically rein in spending.
The Office for National Statistics (ONS) said retail sales fell by 2.4% in the quarter compared with the previous three months, with volumes in September and October falling below pre-pandemic levels for the first time.
It is the worst quarterly sales performance since March last year, when coronavirus restrictions affected retailers, and shows the dramatic deterioration in spending as the UK enters recession.
Month on month, retail sales rose by 0.6% in October but the ONS cautioned this was likely to reflect a rebound from September, when sales fell 1.5% because many shops closed on the day of the Queen’s funeral.
“Looking at the broader picture, retail sales continue their downward trend seen since summer 2021 and are below where they were pre-pandemic,” said Darren Morgan, an ONS director of economic statistics.
According to the latest figures, food store sales fell 1% in October, and remain 4.1% below their pre-pandemic levels, as budget-conscious consumers cut spending amid soaring price rises and the cost of living crisis.
The figures come as the chancellor Jeremy Hunt’s austerity budget on Thursday prompted the Office for Budget Responsibility, the government spending watchdog, to say that people in Britain are facing the biggest fall in living standards since records began.
Sales volumes for household goods stores fell by 4% last month and remain almost 12% below pre-pandemic levels, with consumers continuing to eschew spending on big-ticket items such as furniture.
However, non-food store sales rose by 1.1% month on month in October but remain 1.7% below pre-pandemic levels, spurred by storing growth in secondhand goods stores and auction house sales as consumers increasingly hunt for bargains.
Clothing store sales volumes rose 2.5% last month but remain 3.7% below February 2020 levels, while department store sales volumes fell 0.3% month on month in October.
“Rising retail sales [in October] continue to mask a fall in volumes, as inflation continued to inflict pain on retailers and consumers alike,” said Helen Dickinson, the chief executive of the British Retail Consortium.
“There were drops in purchases of household electricals, while key goods such as pharmaceuticals and footwear held up slightly better. Consumer confidence improved slightly as the political turmoil of recent months began to abate. Retailers are hoping sales will pick up a little as the World Cup and festive season approaches but there is little chance of them catching up with current double-digit inflation.”