What the data shows
- According to British Retail Consortium (BRC) and partners, total UK retail sales growth in October rose by 1.6% year-on-year. (Morningstar)
- On a like-for-like basis (which strips out the effect of store openings/closures), growth slipped to about 1.5% (from about 2.0% in September). (Trading Economics)
- In the food & grocery segment: growth was stronger than non-food, with food retail up about 3.5% year-on-year for October. (Grocery Gazette)
- By contrast, non-food categories (clothing, electronics, toys, etc.) were essentially flat or very weak in growth. (The Guardian)
- Consumer-spending data via credit/debit cards: a fall of ~0.8% in October year-on-year, per Barclays data. (Global Banking | Finance)
- Consumer confidence weakened: the S&P Global UK Consumer Sentiment Index fell to 45.2 in November (down from 47.4 in October). (Retail Sector)
Why the slowdown? Key drivers
Several factors are contributing to the softer retail performance:
- “Wait-and-see” behaviour ahead of Budget & Black Friday
- Many consumers appear to be delaying purchases—especially discretionary/non-essential items—while they await the Autumn Budget (scheduled for 26 Nov) and the big Black Friday discount event (end of November). (Reuters)
- Barclays’ survey found roughly one in three consumers were holding off on major purchase decisions until after the Budget. (Global Banking | Finance)
- Consumer confidence under pressure
- Sentiment has fallen across the board: households are less confident about their finances, future purchasing, job security, etc. (Retail Sector)
- With rising cost-of-living pressures, inflation, and limited real income growth, households are prioritising essential spending or delaying purchases. (FashionUnited)
- Shift in spending mix & inflation dynamics
- The food/grocery sector is doing better than non-food, but much of that growth is price-driven rather than volume-driven. As the BRC put it: “food sales growth … mostly driven by higher prices rather than higher volumes.” (The Guardian)
- In non-food, mild autumn weather, the expectation of upcoming discounts (Black Friday), and consumer caution are dampening demand. (The Guardian)
- Retailer pressure & business cost concerns
- Retailers are cautious: weak demand means they face “hard choices” around investment and staffing, especially with unresolved issues like business rates. (Reuters)
Implications & what to watch
- For retailers: The weaker early autumn performance increases the importance of a strong Black Friday and Christmas period to make up for muted momentum. The risk: if consumer caution persists (or Budget measures undermine confidence further), the holiday uplift may be softer than hoped.
- For consumers: The delay in spending suggests many households are “saving up” or waiting for deals, which could mean heavier discounting by retailers, or shifts in how and what people buy (e.g., focusing on value).
- For the macro economy: Retail spending is a key indicator of household behaviour. The slowdown highlights that the consumer sector remains under strain—meaning growth could be weaker unless confidence recovers.
- For the forthcoming Budget: The government will want to avoid measures that further dent consumer confidence or spending. Retailers will be watching closely for business rate decisions, tax changes, etc., because those feed into investment and hiring decisions. As the BRC noted: “Retailers are counting on Black Friday to deliver a vital boost, but looming Budget decisions risk undermining fragile consumer confidence.” (Reuters)
Summary
In short: UK retail sales growth slowed noticeably in October (to ~1.6% y/y) — the weakest pace since May — with non-food showing the biggest weakness. Consumers are holding off on spending ahead of key events (Black Friday & Autumn Budget), and their confidence is under pressure. Food/grocery is holding up better, but that is more about price than volume. Retailers are entering a critical period where the upcoming Black Friday/holiday season and government fiscal policy will be pivotal.
Good question. Here are some case studies and key comments from UK retailers, economists, and analysts about the recent slowdown in retail sales ahead of Black Friday and the Autumn Budget — plus what they’re worried about and how they’re responding.
Case Studies & Key Comments
- British Retail Consortium (BRC) / KPMG
- Helen Dickinson, Chief Executive of the BRC, said October was “a subdued month, with the weakest growth since May.” (Yahoo Finance)
- She noted that many consumers are delaying discretionary purchases — especially in toys, electronics, and clothing — because they’re waiting for Black Friday deals or are uncertain about what the Budget will bring. (Yahoo Finance)
- Dickinson also warned that uncertainty around business rates (a tax issue) plus weak demand is pressuring retailers on decisions around investment and hiring. (Investing.com)
- Barclays / Consumer Confidence
- Julien Lafargue, Chief Market Strategist at Barclays Private Bank & Wealth Management, described a “wait-and-see” mindset among both consumers and businesses ahead of the Budget, calling it a short-term headwind but suggesting there could be a rebound later:
“Consumers and businesses alike appear to have adopted a ’wait and see’ approach … While this is generating some short-term headwinds, it could position the UK economy for a rebound once the uncertainty lifts …” (Investing.com)
- Barclays’ consumer survey (2,000 people) found that about one in three consumers are postponing “major purchase decisions” until after the Budget. (Investing.com)
- On confidence metrics: Barclays reported that all seven of its “standard measures” of consumer/economic confidence declined — marking the first drop since August 2022. (Yahoo Finance)
- Julien Lafargue, Chief Market Strategist at Barclays Private Bank & Wealth Management, described a “wait-and-see” mindset among both consumers and businesses ahead of the Budget, calling it a short-term headwind but suggesting there could be a rebound later:
- NielsenIQ / Supermarket Sector
- According to NIQ (via its press release), till sales growth at UK supermarkets slowed to +3.2% in the four weeks to 1 Nov, down from +4.1% previously. (NIQ)
- In-store visits are up (+3.9%), but consumers are more focused on discounts: about 24% of spending was on promoted/discounted products. (Grocery Gazette)
- Mike Watkins, Head of Retailer & Business Insight at NIQ, pointed to “fragile consumer confidence” and inflation as key headwinds. (NIQ)
- That said, Watkins also saw a silver lining:
“Whilst shoppers are economising, they are not compromising … we expect sales to accelerate in early December … depending on the success of current advertising campaigns … and the impact of Black Friday.” (FoodManufacture.co.uk)
- Marks & Spencer (M&S)
- According to a Proactive Investors report, M&S sees the cautious consumer behaviour clearly: the slowdown in October “reflects more budget-conscious” shoppers. (Proactiveinvestors NA)
- M&S is feeling the pinch in non-food categories, where consumers are holding off on discretionary spending. (Proactiveinvestors NA)
- Sainsbury’s
- Simon Roberts, CEO of Sainsbury’s (which owns Argos and Habitat), has publicly urged the Chancellor not to raise taxes again, because customers are already delaying spending due to tight household budgets. (The Guardian)
- He said Argos is launching its Black Friday deals earlier than last year to try to stimulate demand — because they’re seeing delayed spend. (The Guardian)
- Roberts also flagged significant cost pressures: for example, a large increase in employer national insurance, plus new regulatory costs on packaging. (The Guardian)
- CBI (Confederation of British Industry)
- A survey by the CBI (which covers many retailers) showed their “sales gauge” is still negative: they reported -27 in October, meaning many retailers are seeing sales volume decline. (Reuters)
- Their forward-looking “expected sales” gauge for November dropped further (to -39), reflecting deep concern among retailers. (Reuters)
- Martin Sartorius, the CBI principal economist, warned that “persistent uncertainty ahead of the autumn budget” is worsening strain on retailers. He called on the government to rule out further business tax hikes to help restore confidence. (Reuters)
Analysis: What These Case Studies Mean
- Retailers are counting on Black Friday more than ever: Because spending is weak now, many are hoping that Black Friday (and the holiday season) will provide a big enough boost to make up for this early-autumn lull. (BRC / NIQ / Sainsbury’s)
- Budget uncertainty is a real risk: Multiple players (BRC, Barclays, CBI, Sainsbury’s) highlight that fears around the upcoming Autumn Budget are damping consumer confidence and spending. Any tax rises or negative measures could further weaken demand.
- Promotions & discounts are intensifying: Supermarkets are seeing a large share of sales happening on promotion (NIQ). Some retailers are launching deals earlier than usual to pull forward spend.
- Retail investment and employment decisions are under strain: Because demand is weak and costs are rising, retailers face hard choices around expansion, hiring, or other investments.
- There could be a rebound—but it’s not guaranteed: Some strategists (like from Barclays) argue that once the Budget is out of the way and if sentiment improves, there could be a strong festive surge. But whether that happens depends a lot on policy decisions and how deep Black Friday discounts go.