The MIA’s Membership with the British Retail Consortium gives us access to an expanded portfolio of unbiased research and analysis to share with our members. Today, we’re providing key macroeconomic data from the UK economy, including inflation figures, footfall levels and sales growth.
Inflation: Prices grow at fastest monthly rate yet
Headline Statistics:
- Shop Price annual inflation accelerated to 6.6% in October, up from 5.7% in September. This is above the 3-month average rate of 5.8%. This marks another record for shop price inflation since this index started in 2005.
- Food inflation accelerated strongly to 11.6% in October, up from 10.6% in September. This is above the 3-month average rate of 10.5%. This is the highest inflation rate in the food category on record.
- Non-Food inflation accelerated to 4.1% in October, up from 3.3% in September. This is above the 3-month average rate of 3.4%. Inflation remains rose to a fresh series’ high in this category.
- Fresh Food inflation strongly accelerated in October to 13.3%, up from 12.1% in September. This is above the 3-month average rate of 12.0%. This is the highest inflation rate in the fresh food category on record.
- Ambient Food inflation accelerated to 9.4% in October, up from 8.6% in September. This is above the 3-month average rate of 8.6%. This is the fastest rate of increase in the ambient food category on record.
Commentary:
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:
“It has been a difficult month for consumers who not only faced an increase in their energy bills, but also a more expensive shopping basket. Prices were pushed up because of the significant input cost pressures faced by retailers due to rising commodity and energy prices and a tight labour market. Even the price of basic items went up, with the price of the humble cuppa rising, as tea bags, milk and sugar all saw significant rises. While some supply chain costs are beginning to fall, this is more than offset by the cost of energy, meaning a difficult time ahead for retailers and households alike.
With Christmas fast approaching, customers are looking for any sign of respite, but it is increasingly difficult for retailers to shoulder the ongoing supply chain pressures. The Government can support households by reducing the cost burden that prevents retailers from keeping prices down for their customers. Government must freeze business rates to prevent an additional £800m bill landing on the plates of retailers and in turn their customers in 2023.”
Footfall stumbles in October
Headline Statistics:
- Total UK footfall decreased by 11.8% in October (Yo3Y), 2.0 percentage point worse than September. This is below the 3-month average decline of 10.8%.
- High Streets footfall declined 11.6% in October (Yo3Y), 0.3 percentage points better than last month’s rate and an improvement on the 3-month average decline of 11.9%.
- Retail Parks saw footfall decrease by 3.7% (Yo3Y), 1.1 percentage points worse than last month’s rate but an improvement on the 3-month average decline of 4.3%.
- Shopping Centre footfall declined by 21.8% (Yo3Y), 0.9 percentage points better than last month’s rate and above the 3-month average decline of 22.2%.
Commentary:
Andy Sumpter | Retail Consultant – EMEA | Sensormatic Solutions
“While Halloween sales may have given some respite to the High Street, shoppers spooked by the rising cost-of-living meant that the reality of growing consumer caution played out in October’s footfall figures.
As consumers and retailers both adapt to what’s being coined the ‘new abnormal,’ in which economic and political uncertainty creates new – and increasingly frequent – curveballs, retailers will be hoping to minimise disruption to safeguard their Christmas performance. Furthermore, with planned postal strikes in November risking disruption to Black Friday deliveries, retailers will be encouraging shoppers to head in store, rather than risking delayed deliveries when shopping online for Black Friday deals.”
Cost of Living rise slows retail sales
Headline Statistics:
- On a Total basis, sales increased by 1.6% in October, against an increase of 1.3% in October 2021. This is below the 3-month average of 1.7% and the 12-month average growth of 2.7%.
- UK retail sales increased 1.2% on a Like-for-like basis from October 2021, when they had decreased by 0.2%. This was in line with the 3-month average growth of 1.2% and above the 12-month average growth of 1.0%.
- Over the three months to October, Food sales increased 5.1% on a Total basis and 4.7% on a Like-for-like basis. This is above the 12-month Total average growth of 1.5%. For the month of October, Food was in growth year-on-year.
- Over the three-months to October, Non-Food retail sales decreased by 1.2% on a Total basis and 1.8% on a like-for-like basis. This is below the 12-month Total average growth of 3.7%. For the month of October, Non-Food was in decline year-on-year.
- Over the three months to October, In-Store sales of Non-Food items increased 1.3% on a Total basis and 0.4% on a Like-for-like basis since October 2021. This is below the 12-month growth of 32.5%.
- Online Non-Food sales decreased by 6.3% in October, against a decline of 8.0% in October 2021. This is below the 3-month average decline of 4.8% and above the 12-month decline of 13.6%.
- The Non-Food Online penetration rate decreased to 39.9% in October from 42.0% at the same point last year.
“As the cost of living for consumers continued to rise, retail sales slowed in October. With November Black Friday sales just around the corner, many people look to be delaying spending, particularly on bigger purchases. Clothing and footwear, which saw stronger sales this year, declined as the mild weather meant customers held back on buying winter outfits. Meanwhile, electric blankets, air fryers and other energy efficient appliances continued to fly off the shelves as people seek future cost savings.”
“Christmas will come later than last year for many and may be more gloom than glitter as families focus on making ends meet, particularly as mortgage payments rise. Retailers hope the World Cup and Black Friday, will give sales a much-needed boost ahead of Christmas. However, with little sign of cost pressures easing, government action is needed to support households. Retailers face an additional government imposed £800m inflationary increase in their business rates bills next year so the government should freeze rates and reform the broken transitional relief system to alleviate cost pressures that are feeding through to higher prices at a time when people are least able to afford them.”
