Retail food sales slow for October

Total food sales remained flat for the month of October based on like-for-like sales, although the three-month and 12-month rolling average experienced small growth. That’s according to BRC-KPMG retail sales monitor for October 2015.

“After a couple of months of modest growth, the food and drink year-on-year comparison in October fell back into marginally negative territory,” said Joanne Denney-Finch, chief executive at IGD – the global food and consumer goods expert.

She recognised that this could be partially attributed to deflation, which “continues to dampen down the figures”. Furthermore, she claimed that research showed that one in 10 shoppers expected food prices to fall further in the coming year.

“This cautious mood helps explain why the combination of rising incomes and falling prices has triggered only a modest amount of trading-up on food and drink so far. However, this could change as we enter the crucial Christmas trading phase,” continued Denney-Finch.

Alongside the impact of deflation, cultural and social events that took place in October have also been considered to have a negative effect on retail grocery sales.

The BRC-KPMG report recognised that food sales did not get the full benefit from England hosting the Rugby World Cup, due to the English team’s early exit in the competition. Furthermore, Halloween falling on a Saturday is said to have impacted sales as more people were partying rather than shopping.

Retailers will be looking to George Osborne’s Autumn Statement with the hopes that issues facing the industry will be addressed. Helen Dickinson, chief executive at the British Retail Consortium, said: “With the Chancellor due to publish both the Autumn Statement and Spending Review in just a few weeks’ time, the government has an opportunity to help UK retailers to invest in growth and create new jobs by reducing the disproportionate burden of business rates and keep going with the structural review.”

Although like-for-like sales during the month of October remained static, Dickinson noted: “The picture is brighter when we look at the three- and 12-month averages, both of which continue to improve.”

The three-month and 12-month averages saw a respective increase of 0.5% and 0.3%, claimed the report. This is believed to be the best 12-month average since July 2014.

“[When] adjusted for food deflation, as measured by the BRC-Nielsen Shop Price Index, the three-month average food growth was the best since May, at 0.7%, in line with the 12-month average, which was the best since January 2011,” said the paper.

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