UK retail sales decline more than expected in October

The underlying volume of UK retail sales declined more than expected in October in figures released on Thursday showed.

According to the Office of National Statistics, retail sales fell 0.9% last month compared with a 1.7% gain in September and analysts’ expectations for a 0.6% decline.

The total volume of retail sales including automobile fuel declined 0.6% last month, below the consensus expectation of a 0.5% fall and sharply lower than September’s 1.9% gain.

Meanwhile, the three-month on three-month average growth rate grew 0.9%, marking the 23rd consecutive month of growth.

The value of spending in the retail industry increased by 0.5% year-on-year in July but decreased by 0.7% compared with the previous month, while the value of online sales surged 11.2% year-on-year but fell 0.8% from September.

On a yearly basis, ONS said retail sales fell from 5.7% to 3%, short of analysts’ expectations for a 3.9% reading.

When including automobile fuel, retail sales fell increased 3.8% year-on-year, short of consensus for a 4.5% gain and way below the 6.2% advance registered in September.

“The shopping period over the coming weeks is of vital importance to retailers, and it will be interesting to see how aggressive they are in their discounting in the run-up to Christmas,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“In particular, retailers approach to “Black Friday” at the end of November will be key.”