Retail sales in the UK experienced modest growth in November, with volumes rising by 0.2%, according to the Office for National Statistics (ONS). This minor improvement comes after a sharp 0.7% decline in October. However, the increase was weaker than anticipated, as economists had forecast a 0.5% rise.
Retail Performance Overview for November
Retail performance in November revealed significant disparities across sectors:
- Clothing and footwear: Sales volumes dropped sharply by 2.6%, the weakest monthly performance since January 2022. This reflects delayed seasonal purchases and consumer caution.
- Food and drink retailers: Sales grew by 0.5%, driven primarily by supermarkets, which benefitted from increased pre-Christmas spending.
- Household goods retailers: Experienced a 1.1% rise in sales, led by strong demand for furniture, likely boosted by early holiday shopping and promotions.
Online Sales Struggle Amid Black Friday Promotions
Online retail sales declined for the second consecutive month despite widespread Black Friday discounts. This suggests a cautious approach from consumers, who may be delaying purchases or focusing on essentials.
Main observations:
- Consumer behaviour: Anxiety over the Autumn Budget and rising living costs likely caused many shoppers to postpone discretionary spending, including clothing and seasonal items.
- Sector-specific trends: Online discounts appeared insufficient to counter the general downturn, indicating broader economic factors at play.
Insights on Retail Performance Challenges and Trends
Hannah Finselbach, senior statistician at the ONS, highlighted the challenges: “For the first time in three months, food store sales picked up, particularly in supermarkets. However, clothing store sales fell sharply again as retailers reported tough trading conditions.”
Retail performance remains fragile, influenced by the following factors:
- Delayed spending: Consumers appear to be holding off on significant purchases, which could weigh on festive season outcomes.
- Cost-of-living pressures: High inflation and stagnant wages are reducing disposable income, forcing shoppers to prioritise necessities.
Retailers at a Crossroads: The Impact of the Festive Season on Sales Performance
Retailers face a pivotal period as the festive season progresses. The success of late-December sales will likely determine whether November’s muted recovery can be sustained. Aggressive promotional strategies and last-minute shopping are expected to play a significant role.
Sector Performance Overview (November 2023)
| Sector | Sales Change (%) | Key Insights |
|---|---|---|
| Clothing and Footwear | -2.6 | Lowest levels since Jan 2022; weak seasonal demand. |
| Food and Drink | +0.5 | Boosted by supermarkets; early festive spending. |
| Household Goods | +1.1 | Growth driven by furniture sales, supported by pre-holiday demand. |
| Online Sales | Declined | Discounts insufficient to offset cautious consumer sentiment. |
