The colder weather and celebration of Halloween in October has led to a surge in British retail this October, lifting annual sales growth to its highest in over 14 years.
The Office for National Statistics (ONS) found that sales volumes increased 7.4 percent compared with this time last year, alongside the “strongest growth in internet sales seen for five years.”
The supermarket Waitrose felt this increase in sales, rising 4.2% to £135.4m in the week to November 12.
The supermarket’s retail director, Ben Stimson said: “Our recently launched Christmas advert features the epic journey of a robin, with the theme of welcoming guests over Christmas. It was clear this week that shoppers have already begun preparing to host friends and family over the Christmas season, with sales of party food up 26% and Christmas cakes up 65%.”
Retailer John Lewis (LON:BD32) also saw sales rise 1.8% to £112.4m in the same week. The first 15 weeks of the second half of 2016, sales rose 4.3%.
Electrical and home technology buying director Johnathan Marsh said that “Fashion was the strongest performer, with the cold weather contributing to a +4.5% sales uplift.”
Retail sales volumes jumped 1.9 percent in October after increasing only 0.1 percent in September, the Office for National Statistics said. This was almost double the highest forecast in a Reuters poll of economists.
ONS statistician Kate Davies has said that “Cooler temperatures in October boosted clothing sales as shoppers took their cue to purchase winter clothing, while the supermarkets benefited from Halloween,”
Mark Carney, Bank of England Governor, warned this week that the prices faced by British consumers will soon start to rise as stores pass on the near 20 percent drop in sterling since the referendum, eating into spending growth.
The strong retail sales growth seen is not expected to offset weakness seen throughout the rest of the economy.
The Bank of England expects rates to slow next year.