Retail sales fall as shoppers delay spending ahead of Budget and Black Friday

Retail sales fell in October as consumers worried about delaying purchases ahead of the Chancellor’s Budget and the start of the Black Friday discounting period. Sales volumes fell 1.1%, the first contraction in three months and much worse than economists had expected.

The Office for National Statistics (ONS) said the decline was partly driven by shoppers deliberately postponing spending until major discount events this month. Grant Fitzner, chief economist at the Office for National Statistics, said many consumers reported waiting for Black Friday deals, which start next week. October also marks the opening of the important ‘golden quarter’ of retail trade in the run-up to Christmas.

This decline reflects a 0.7% rise in retail volumes recorded in September – a figure that was revised upwards from 0.5%. Although sales rose 1.1% on a rolling three-month basis and were 0.4% higher than a year earlier, spending fell across nearly every major category last month. Department stores were the most affected, with sales falling by 4.5%, while clothing and shoes fell by 1.5%. Household goods fell 0.4%, and online sales fell 0.4%. Technology sales were the exception, supported by the launch of Apple’s latest iPhone.

Economists warned that shoppers’ caution reflects growing anxiety about the upcoming budget, amid speculation about increased taxes and their impact on disposable income. Rob Wood, chief UK economist at Pantheon Macroeconomics, said the “increasingly chaotic period leading up to the Budget” had led to a decline in confidence. He said speculation about an income tax rise was likely to impact households throughout October, with political turmoil in November expected to further dampen sentiment.

Ruth Gregory of Capital Economics said retailers may not enjoy the strong fourth quarter they had hoped for. “The tax hike in the Budget could restrict retail spending over the crucial holiday period and into next year,” she said.

Despite the weak October numbers, some analysts believe retailers still have opportunities to capitalize on demand. Brands are preparing more personalized and creative Black Friday campaigns to offset consumer hesitation, said Sagar Shah, associate partner at McKinsey & Company. He pointed to a shift toward immersive experiences, anti-ad formats, and shoppable content designed to overcome “ad fatigue” and increase engagement.

Retail sales remain a key early indicator of broader economic momentum, and October figures provide fresh evidence of consumers’ readiness for fiscal tightening ahead of what is expected to be a tax-heavy Budget.