Retail Sales Surge as Chilly Britons Snap Up Winter Clothesby
Sales volumes rose 1.9% in October versus 0.5% gain predicted
Clothing sales surge 5.1%, biggest gain since early 2014
U.K. retail sales surged far more than economists expected in October as cooler weather boosted spending on winter fashions, sending clothing and footwear sales to the biggest increase in more than 2 1/2 years.
The volume of goods sold in stores and online jumped 1.9 percent from September, the most since July, the Office for National Statistics said on Thursday. A 0.5 percent increase had been forecast in a Bloomberg survey. From a year earlier, sales surged 7.4 percent, the strongest performance since April 2002.
“Cooler temperatures in October boosted clothing sales as shoppers took their cue to purchase winter clothing, while the supermarkets benefited from Halloween,” said ONS statistician Kate Davies. “This has also coincided with the strongest growth in Internet sales seen for five years.”
The figures suggest the British consumer remains in robust health after driving the economy to unexpectedly strong growth in the three months following the decision to leave the European Union.
But there are questions over how long that will last. Employment growth is slowing and household incomes are coming under growing pressure as the fall in the pound since the Brexit vote spurs inflation.
“It’s still spend spend spend in the U.K. but risks lie ahead, ” ING economist James Smith said.
Clothing and footwear, which account for 12.5 percent of total sales, jumped 5.1 percent, the most since March 2014. British clothing retailers rose on the news. As of 11:30 a.m. in London, Next Plc was up 1.5 percent while the General Retailers Index climbed 0.4 percent.
While the ONS said there was no anecdotal evidence of increased spending by overseas shoppers, the pound has weakened against all its major peers this year.
Sales of household goods gained 0.8 percent and food sales climbed 0.8 percent. A 26.8 percent annual rise in the value of Internet sales was the biggest since January 2011. Sales excluding auto fuel jumped 2 percent on the month.