Christmas shoppers buy gifts early to avoid supply shortages

FEARS of empty shelves at Christmas have prompted shoppers to buy early presents, lifting retail sales for the first time in six months.

The demand for toys, sports gear and clothes pushed sales volumes up 0.8pc in October, stronger than expected and the first monthly rise since non-essential shops reopened after the third lockdown last April.

Aled Patchett, head of retail and consumer goods at Lloyds Bank, said: “A high proportion of consumers are doing their Christmas shopping early this year given supply chain uncertainty and the potential for product shortages closer to the big day.”

The figures follow Office for National Statistics surveys suggesting one in eight of all adults had begun festive shopping early this year amid concerns over shortages of toys and clothes.

The latest sign of shoppers’ willingness to spend strengthens the case for an interest rate rise from the Bank of England next month, after inflation hit a decade-high 4.2pc and jobs figures showed record vacancies despite the end of the Covid-19.

Investors are currently pricing in a 15 basis point Bank rate increase to 0.25pc next month, a step that would be the first hike by a major central bank since the pandemic started.

Economists at Royal Bank of Canada expect a 25 basis point increase.

Shoppers are also armed with an estimated £180bn in savings built up during the pandemic, supporting spending despite rising energy bills and looming tax rises. Research firm GFK has also reported a surprise rise in consumer confidence last month and a willingness to splash out on big ticket items.

Joe Staton from Gfk’s said: “The seven-point jump in major purchase intentions in the run-up to Black Friday and Christmas [is] ... a sign that shoppers are ready to bounce back ... That’s how it looks, but consumers also know that when the festivities are over it’s going to be a tough year in 2022.”

Non-food sales rose 4.2pc over the month as clothing sales jumped 6.2pc but “other” sales including games, toys and sports equipment rose even more rapidly with a 7.2pc gain. Petrol and diesel sales meanwhile sank 6.4pc in October as September’s panic-buying over fuel shortages subsided.

But doubts remain over whether the spending spree will last.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The pick-up appears to reflect consumers purchasing Christmas presents earlier than usual due to warnings about product availability, rather than a sustainable improvement.”