London (MNI) – Retail sales posted their first rise in three months
in October, boosted by increased sales of toys and games as well as
customers bringing forward purchasers of big ticket items ahead of the
VAT rise in January, figures released by National Statistics revealed
Thursday.

Retail sales volumes rose by 0.5% on the month in October and were
down 0.1% on the year, just above the median forecast for an increase of
0.4% on the month and a flat outturn on the year.

Excluding auto-fuel, sales were up 0.3% on the month and by 1.2% on
the year, also slightly above the median forecast.

While the October data were stronger than City analysts had
expected, there was a downward revision to the September figures which
now show headline retail sales fell 0.5% on the month, compared with the
original estimate of a fall of 0.2%. Confusing the picture more was an
upward revision of 0.3 percentage point to the August data which now
show volumes fell 0.4% from July.

For Q3 as a whole, volume growth was revised down slightly to show
a rise of 0.9% from Q2 compared with the previous estimate of 1%.

Sales in October were boosted by sales at other goods stores, most
notably of toys and games and sporting equipment. Other goods store
sales rose 1.6% on the month.

Clothing and footwear sales rose 0.6% on the month while non-store
retailing and repair sales were up 1.2%.

National Statistics said there was anecdotal evidence from
retailers that sales of big ticket items were up as consumers brought
forward purchases ahead of the planned rise in VAT to 20% from 17.5% in
January.

In spite of this sales at household goods stores were down 0.6% on
the month and department store sales were down 0.8%.

On a trend basis there is evidence that sales growth is slowing
with the three month trend continuing to fall. Sales volumes in the
three months to October were up just 0.1% compared with the previous
three months, down from 0.9% in September.

The retail sales deflator, a guide to prices on the High Street,
rose to 2.2% in October from 2% in September. Excluding auto-fuel the
deflator remained steady at1.5%.

–London bureau: 00 44 207 862 7492; email: wwilkes@marketnews.com

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