Retail sales growth at 17-month high

Author: By Russell Lynch, Press Association

October’s sales were 0.4 per cent ahead of an upwardly-revised September
figure and 3.4 per cent ahead of the same month last year – the biggest
year-on-year rise since May 2008 at the beginning of the recession.

The rise was driven by buoyant clothing and footwear sales, the Office for
National Statistics (ONS) said.

The figures showed sales volumes for clothing and footwear stores 10.7 per
cent higher than a year ago, buoyed by half-term shopping and Halloween
celebrations.

Annual growth in non-food retailing reached 3.5 per cent compared with 1.6 per
cent across food stores, the ONS said.

The biggest year-on-year increase came from non-store retailing and repair.
This category, which includes online giants such as Amazon, saw sales
volumes up 15.8 per cent on October last year.

The ONS said there was anecdotal evidence of shoppers bringing forward online
purchases due to fears of disruption from the postal strike.

Last month’s retail sales data showed that, by value, sales also rose by 0.4
per cent between September and October and by 3 per cent year-on-year to
£22.4 billion.

The average weekly value of sales was £5.6 billion.

There was more evidence of falling inflation and cost cutting on the high
street, with the ONS estimating that prices fell 0.4 per cent year-on-year
in October.

While October’s month-on-month rise in volumes was slightly below the 0.5 per
cent expected in the market, economists said the figures were encouraging.

Jonathan Loynes, chief European economist at Capital Economics, said: “October’s
UK retail sales figures confirm that high street spending is still holding
up reasonably strongly in the face of some pretty adverse conditions for
consumers.”

But he added that spending elsewhere was still under pressure amid the
recession and rising numbers of jobless.

He said: “Spending off the high street – on services, etc – has been much
weaker during the economic downturn, with the result that overall household
spending probably fell again in the third quarter.

“With household debt still very high, unemployment set to rise a lot
further and a fiscal squeeze looming, the outlook for consumers is hardly
rosy.”

But economist David Page at Investec Securities said the sales rise in October
and the September revision suggested the retail result may provide further
scope for an upward revision to third quarter gross domestic product
estimates.

The second GDP estimate is due to be published next week.

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