Retail sales slipped in October as wary consumers delayed purchases ahead of the Chancellor’s Budget and the start of the Black Friday discount period. Sales volumes fell by 1.1%, the first contraction in three months and significantly worse than the flat reading economists had expected.
The Office for National Statistics (ONS) said the drop was partly driven by shoppers intentionally holding off on spending until this month’s major discount events. Grant Fitzner, ONS chief economist, said many consumers reported waiting for Black Friday deals, which begin next week. October also marks the opening of retail’s critical “golden quarter” in the run-up to Christmas.
The fall reverses a 0.7% rise in retail volumes recorded in September — a figure revised up from 0.5%. Although sales rose 1.1% on a rolling three-month basis and were 0.4% higher than a year earlier, spending fell across almost every major category last month. Department stores were hit hardest, with sales down 4.5%, while clothing and footwear dropped 1.5%. Household goods fell 0.4%, and online sales declined 0.4%. Technology sales were the exception, boosted by the launch of the latest Apple iPhone.
Economists warned that shoppers’ caution reflects growing anxiety over the forthcoming Budget, amid speculation about higher taxes and the impact on disposable incomes. Rob Wood, chief UK economist at Pantheon Macroeconomics, said the “increasingly chaotic run-up to the Budget” had dented confidence. He argued that speculation over income tax rises likely weighed on households throughout October, with political turbulence in November expected to depress sentiment further.
Capital Economics’ Ruth Gregory said retailers may not enjoy the strong final quarter they had been hoping for. “Higher taxes in the Budget could restrain retail spending over the crucial festive period and going into next year,” she said.
Despite the softer October figures, some analysts believe retailers still have opportunities to capture demand. Sagar Shah, associate partner at McKinsey & Company, said brands were preparing more personalised and creative Black Friday campaigns to offset consumer hesitancy. He noted a shift towards immersive experiences, anti-advertising formats and shoppable content designed to cut through “ad fatigue” and drive engagement.
Retail sales remain a key early indicator of wider economic momentum, and October’s figures provide fresh evidence of consumers bracing for fiscal tightening ahead of what is expected to be a tax-heavy Budget.
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Retail sales fall as shoppers delay spending ahead of Budget and Black Friday