Retail sales volumes saw a modest decline of 6% in October 2024, reversing the slight growth of 4% recorded in September. This downturn, as highlighted by the CBI Distributive Trades Survey, reflects a shift in consumer behavior, largely influenced by the uncertainty surrounding the Autumn Budget. Many retailers are bracing for flat annual sales in November, indicating a cautious outlook as they navigate a challenging economic environment marked by fluctuating consumer confidence.

Seasonal Sales and Online Shopping Trends

Seasonal sales have not met expectations, further contributing to the anticipated weak demand in November. Despite the overall downturn in retail, online sales are thriving, with a notable increase of 21% in October. This growth trend is expected to continue, with forecasts predicting an additional 27% rise in online shopping activity next month. The stark contrast between in-store and online sales suggests that while foot traffic may be declining, consumers are increasingly gravitating toward digital platforms for their shopping needs. Retailers who adapt to this shift by enhancing their online offerings may find opportunities for growth despite the overall market challenges.

Retailers are projecting flat annual sales for November, reflecting cautious sentiment as seasonal sales fell short of expectations and weak demand is anticipated. While in-store shopping faced challenges, online sales thrived, increasing by 21% and expected to rise further. Supplier orders also declined, indicating broader trends in the distribution sector, prompting calls for business rate reforms and tax stability to support retail resilience amid changing consumer behavior.

Supplier Orders and Economic Outlook

On the supply side, orders to suppliers have also declined, dropping by 5% in October, with expectations of a more significant decrease of 24% in November. The overall distribution sector is experiencing moderate sales declines, and this trend appears to be continuing into the next month. Economist Martin Sartorius has noted the heightened caution among consumers and emphasized the importance of strategic reforms. He calls for business rate reforms and tax stability in the forthcoming Budget to bolster retail resilience. As retailers grapple with these economic pressures, the need for a clear and supportive policy framework becomes increasingly critical to fostering recovery and growth in the retail sector.