PRESS RELEASE : PwC comments on Oct 2022 retail sales figures [November 2022]

The press release issued by PWC on 18 November 2022.

Commenting on the Office of National Statistics retail sales index for Oct 2022, Lisa Hooker, Industry Leader for Consumer Markets at PwC, said:

While headline retail sales increased slightly in October on both a volume and pound note basis compared with the previous month, this was entirely due to the loss of a trading day in September for the Queen’s funeral.

Worryingly, on an annual basis, the 2.9% increase in overall retail sales excluding petrol was accounted for by the record inflation that was reported earlier this week. On a volume basis, shoppers were actually buying 6.7% less than last October.

Supermarkets were particularly hard hit last month, as shoppers bought less, wasted less and traded down to cheaper alternatives in the face of 16.4% inflation, a 45 year high. But, even apart from groceries, non-food sales continued to fall behind pre-pandemic levels as consumers started to cut back as the impact of higher energy and food bills hit and more is spent on second hand goods.

One saving grace for the high street is the return of shoppers from online into physical stores. The proportion of retail sales online, while higher than before the pandemic, continued to fall back, helped by both the mild weather and a growing preference for physical shopping among younger generations.

With little over a month to go until Christmas, retailers will be hoping that the picture improves. Particularly compared with the disappointment of last year when the Omicron variant cancelled many festive plans at the last minute. We think there is a good chance of one last hurrah before the tax rises announced in the Autumn Statement hit. For example, shoppers already tell us that they’ll be spending £0.5 billion more in the Black Friday sales next week.

However, with the country facing the biggest decline in real disposable income since the end of World War II, and continued cost headwinds in the form of higher energy and input costs and National Living Wage increases, there is no question that the retail sector will face unprecedented challenges in 2023.