Retail sales better than expected

20 November 2008 10:22am

Official sales figures from the UK high street continued to defy expectations.

Retail sales declined by 0.1% in October, during a time when consumer confidence was shaken by turmoil in financial markets, the Office for National Statistics (ONS) said.

The decline was much better than expected by economists, who had predicted a fall of 0.5% or more.

Analysts said the detail of Thursday's release continued to cause alarm.

Vicky Redwood at Capital Economics said: "The much bigger 1.1% drop in non-food sales clearly suggests that discretionary spending is taking a hit.

"Household goods and clothing sales, in particular, nosedived, dropping by 1.5% and 3.4% respectively," she said.

"What's more, anecdotal evidence suggests that the past couple of weeks have been even more shocking for retailers, as illustrated by the rash of price discounting announced this week."

Major retailers have this week slashed prices in an apparent bid to breathe life into high street sales in the run up to Christmas, which should be their busiest period.

Marks & Spencer on Thursday cut prices by 20% in its clothing and homewares departments in its biggest one-day promotion for four years.

Retail giants Debenhams and Bhs were also discounting stock this week.

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