ONS Retail Sales October 2022

Retail sales (value, non-seasonally adjusted, exc. fuel) rose by a soft 2.8% year-on-year (YoY) in October according to the latest ONS data, lagging inflation as budgets come under pressure.
In volume terms, retail sales fell by 6.7% YoY in October against a decline of 1.9% a year ago (non-seasonally adjusted, exc. fuel), marking its weakest rate since the first Covid-19 lockdown in 2020.
Annual volumes have been in decline since March, with the three-month-on-three-month volume rate seeing deepening declines of -2.4% in the quarter to October (volume, seasonally adjusted).

Retail sales value and volume growth has detached

Source: ONS, Retail Economics analysis

Note: all retail sales figures provided below are non-seasonally adjusted, excluding Fuel, unless stated otherwise.

Food and non-food

Food stores continue to be impacted by surging inflation across essentials, with volumes under intensifying pressure. Although food sales values rose by 5.1% in October (versus 1.4% last year), food volumes declined by 7.2% on last year – its weakest rate since the lifting of restrictions in March.
Clothing sales weakened against strong comparatives. Clothing sales rose by just 3.6% YoY in the October against 16.6% growth a year earlier. Volumes declined at the fastest rate since 2021’s lockdown, deepening to -5.4% YoY in October.
Furniture and lighting volumes declined by 8.0% in October, against a weak 15.8% decline in the previous year.
Volumes across Household Goods declined by 13.8% in October. Sales values declined by 5.7% in the month, against a 6.2% decline in the previous year.
The ONS noted that other non-food stores, which includes second-hand retailers and auction houses, reported a strong monthly rise in sales volumes as consumers look to cut expenses. Although sales volumes were down 7.5% on last year, it marked its strongest performance since March, with volumes jumping 28.2% between September and October.

Online

Online sales values declined by 7.4% YoY, compared to a weak 0.6% rise a year earlier.
All major online categories recorded a decline in the month. The deepest declines online remained across Household Goods (-11.1%). Non-store retailing (a proxy for pureplay retailers) saw sales decline by 6.0 % YoY in October, while foods sales dropped 8.0%.
The proportion of retail sales made online was 26.0% in October, down from 28.9% a year earlier.

Retail sales price deflator

The retail sales deflator (a measure of inflation specific to retail) remained at a record 10.2% YoY in October excluding fuel (records began in 1989). The deflator stepped up 11.4% when including fuel.
The implied price deflator among food stores accelerated to 13.3% YoY in October, marking a fourth month of double-digit rises. Among non-food stores, the price deflator rose by 8.1% in the month.