Written by: Susannah Streeter | Hargreaves Lansdown
October retail sales: Christmas comes early as fears of shortages ring through tills
- Retail sales volumes rose by 0.8% in October 2021, with volumes 5.8% higher than their pre-coronavirus levels (COVID-19).
- Retail sales were revised upwards from a fall of 0.2% between August and September to be unchanged.
- Non-food stores was the main retail sector that saw a rise in sales volumes, increasing by 4.2% in October 2021.
- Clothing stores reported an increase of 6.2% over the month with feedback from some retailers suggesting that early Christmas trading had boosted sales.
- Clothing stores sales volumes in October 2021 were only 0.5% below pre-pandemic levels in February 2020.
The ONS retail sales update for October has just been released
The ONS has released other data this week showing levels of home and office working
The ONS has released data detailing our spending patterns in November. **
‘’There are signs Christmas has come early for retailers with many shoppers not waiting until Halloween was over before hitting stores, spooked by warnings that some gifts and toys could be in short supply this year. The data also seems to show the squeeze on incomes is already being felt with shoppers keen to sniff out a bargain in charity shops and on auction sites. Sales volumes in second hand goods stores accounted for a big chunk of the 7.2% rise in volumes in other non-food stores.
There was a fresh surge in clothing sales, which jumped 6.2% over the month. It’s little surprise that shoppers are prepared to splash more cash and ensure they get their hands on the latest styles given that people have been waiting to get the parties started for so long.
Other ONS data* shows that more staff have headed back to the office now – with half of businesses saying their workforces had returned to their normal place of work up from a third in early September. Plenty of employees clearly want to put their best foot forward when it comes to meeting colleagues once more so revamping work wardrobes also seems to have driven sales.
Online sales dipped in October by 0.6% as shoppers appear more enthused and confident about hitting the shops, resulting in a fall in the proportion of online sales to 27.3% in October 2021, from 28.1% in September.
However while this is the lowest proportion of online retail spending since March 2020 (22.5%), it remains far higher than the proportion of online retail spending since the crisis hit in February 2020, when it stood at 19.7%. Another survey** out from the ONS this week revealed that although footfall has risen slightly last week compared to the previous week, it’s still only 85% of pre-pandemic levels. Other data revealed that more than half of companies (51%) do expect more than three quarters of the workforce to come back to their normal place of work, one in eleven companies don’t expect staff to return. This big shift will continue to have ripples right across retail particularly for stores in town and city centres where footfall remains depressed compared to retail parks.
Although shoppers are keen to browse, they are likely to be sniffing out even more bargains as we head towards Christmas as there are also signs that the higher levels of spending we’ve seen recently are easing off. In the week to 11 November 2021, consumer spending on credit and debit cards fell slightly to 101% of its pre-pandemic average from 105% the week before. Nevertheless the rebound overall in sales and signs of further improvement in the public finances, with borrowing in October coming in £2 billion lower than September, are likely to add to expectations that there could be a rise in interest rates in December.’’