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    Retail sales pick up momentum ahead of Christmas

    A shopper walks past a Christmas window display at John Lewis, Oxford Street on November 7, 2021 in London, England. (Photo by Chris J Ratcliffe/Getty Images)

    Customer demand is getting back on track ahead of Christmas as sales grew at a faster rate in October than the month prior, and well above its pre-pandemic levels, providing a modest boost for the high street.

    According to the BRC-KPMG Retail Sales Monitor, covering the five weeks between 3 – 30 October, total sales increased by 1.3 per cent, against a growth of 4.9 per cent in October 2020. However, on a two-year basis, total retail sales grew 6.3 per cent during October compared with the same month in 2019.

    “The much reported squeeze on household spending has yet to materialise as consumers seem happy to carry on shopping,” commented Paul Martin, UK Head of Retail at KPMG.

    “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.”

    Over the three months to October, food sales increased 1.5 per cent on a total basis and 0.3 per cent on a like-for-like (LFL) basis. For the month of October, food was in growth year-on-year.

    “The food and drink sector saw another muted performance in October, with sales down versus 2020, when shoppers increasingly stocked up ahead of the second lockdown in November. Preparations for Halloween 2021 offered a slight boost to performance, though the actual day fell out of the reporting period,” Susan Barratt, IGD chief executive, said.

    “IGD’s Shopper Confidence Index reached one of its lowest levels (-11) in October. Our ShopperVista research reveals 28 per cent of shoppers now expect food to get much more expensive in the year ahead, the highest level recorded, with increasing numbers signalling that rising food, energy and petrol prices are having an impact.”

    During the same period, non-food retail sales increased by 1.8 per cent on a total basis and decreased by 0.1 per cent on LFL basis. The category was in growth year-on-year in October. On a two-year basis, non-food sales saw growth of 7.4 per cent for the three-months to October.

    In-store sales of non-food items grew 7.9 per cent on a total basis and increased 4.5 per cent on LFL basis, but on a two-year basis, stores saw a decline of 4.4 per cent on LFL basis and 2.0 per cent on a total basis.

    “Some people started their Christmas shopping early with beauty advent calendars flying off the shelves and searches for Christmas items ramping up online,” Helen Dickinson, chief executive of the British Retail Consortium (BRC), said.

    She noted that 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, but warned that prices are going to be a concern.

    “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,” she said.

    Online non-food sales decreased by 8.0 per cent in October, against a growth of 39.0 per cent in October 2020. Non-food online penetration rate decreased to 42.0 per cent in October from 48.8 per cent in October last year. While down on last year, it was up 10.4 percentage points on the 31.6 per cent seen at the same point in 2019.

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