Retail sales in the UK experienced a sharp decline of 0.7% in October 2024, marking the steepest drop in four months. This follows a revised 0.1% increase in September and far exceeded forecasts of a 0.3% decline. The slump highlights ongoing challenges for the retail sector as consumer confidence remains fragile, and uncertainty surrounding the Budget announcement weighs heavily on spending habits.

Non-Food Stores Lead the Decline

Sales in non-food stores fell by 1.4% in October, reversing the 2.3% growth seen in September. Clothing stores were particularly impacted, reporting a 3.1% drop in sales. This decline comes after strong performances in previous months, buoyed by end-of-season promotions and improved weather. The latest figures suggest that the momentum from earlier in the year has now fizzled out.

Online Sales Continue to Struggle

In addition to brick-and-mortar stores, online sales also saw a downturn, contracting by 1.2% in October. The data reflects a broader trend of cautious consumer behavior amid economic uncertainty. Retailers across the board are grappling with the impact of reduced discretionary spending as households tighten budgets.

Year-on-Year Growth Falls Short of Expectations

Despite the monthly drop, retail sales were up 2.4% year-on-year in October. However, this fell short of the 3.4% forecast and was lower than the downwardly revised 3.2% growth recorded in September. The figures underscore the challenges facing retailers as they navigate fluctuating consumer sentiment and a competitive market environment.