LONDON (ShareCast) - (ShareCast News) - UK retailers endured subdued sales during October, with a disappointingly flat reading for the BRC-KPMG Retail Sales Monitor and a like-for-like decline for the month.
October retail sales fell 0.2% on a like-for-like basis compared to last year.

Total sales for the month rose 0.9%, which compared badly to the 1.8% average over the last three months, a 1.9% average over a 12-month period and against a 1.4% comparative figure from October last year.

On a three-month basis food sales fell 1.1%, an improvement from the 1.4% decline reported a month ago, but non-food's 2.1% rise was a sharp slump from the 3.1% average shown in September.

Total food sales were flat in October year-on-year but the 3-month and 12-month rolling averages, at 0.5% and 0.3% respectively, continued to show the steady upticks experienced in recent months.

LFL non-food growth dived from around 6-6.5% in September to only about 1% overall, with footwear and house textiles declining the most in the month.

A mild autumn meant clothing had a slow start to the month but overall showed growth both in total and like-for-like terms for all segments, but as it was driven by mid-season sales this may be to the detriment of retailers' profit margins. Furniture also had a good month.

Helen Dickinson, BRC chief executive conceded that October was "somewhat disappointing".

"A number of categories which we'd typically expect to be popular on Black Friday saw a slowdown in October, suggesting that some shoppers may be holding out in the hope of some great deals at the end of November."

Following on from comments made by Tesco chief Dave Lewis on Monday about the "lethal cocktail" of tax and costs on the retail industry faced, KPMG's David McCorquodale added: "Looking ahead, retailers will be keeping a close eye on the Autumn Statement at the end of November in the hopes the Chancellor extends relief on business rates. The tactics around Black Friday will also reveal who has the strength to play yet maintain margin."

Analyst Clive Black at Shore Capital also was looking ahead, predicting Christmas 2015 will be an enjoyable one.

"The retail segment should also enjoy a British consumer who is benefiting from rising living standards with robust confidence measured by GfK NOP. More particularly though we sense that the leisure segment may be particularly well positioned to capture rising discretionary expenditure in the UK."

ShoreCap expect bigger ticket gifting to be strong this coming Christmas whilst ongoing expenditure on homewares should also be robust, while the grocery sector should also enjoy strong 'trading up'. "It will be interesting to see if the Limited Assortment Discounters (LADs) can keep up their strengthening footfall at a time when they often suffer to shoppers trading up to something 'nicer' at the superstores."

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