October was a slightly better month, with sales back in marginal growth, rebounding from a challenging September. October’s total sales were up 0.6% (Sept -1.3%) with LFL +0.1% (Sept -1.7%).
Non-food sales were positive in October, according to the BRC, but the average last 3 month non-food in-store sales were down -1.9% (LFL -1.8%) with in-store LFL sales down -3.7% partially offset by 5.1% growth in online. Food remains solid with 3 month food sales up 1.6% with LFL +0.5%.
October was ‘an extraordinary period of discounting’, according to the BRC suggesting growth was bought and pressure remains on profits.
Fashion was the best performing category in October, helped by a short cold snap, which benefitted more wet weather gear rather than cold coats and knitwear. However, consumers were bargain hunting with discounting described as ‘high’. Like clothing, footwear also benefitted from promotions and posted its best performance since Sept 2015.
Note in Next’s Q3 trading update, Lord Wolfson felt Next’s strong October sales performance (full-price sales +5%) recouped some of the weak September sales (full price sales + 1%) and warned not to extrapolate this growth rate forward. M&S reports H1 results tomorrow (Oct 6) with Superdry on Oct 7.
Furniture returned to growth, with consumers taking advantage of lower ticket item. Beds outperformed sofas. Promotions helped Home Accessories and Household Textiles, with Home Appliances and Computing categories (new iphone) in growth.
Consumers seem to be holding off on Christmas purchases to an extent, with Health & Beauty and Toy sales down. This could be due to the timing of half-term. Other categories in decline were Gaming and Home Improvement
