According to the latest data released by the Office for National Statistics (ONS), UK retail sales in November fell below expectations. Despite predictions of a strong performance during Black Friday, sales volumes actually decreased compared to October. In particular, non-food stores experienced a decline in sales volumes of 0.6%, which was 1.8% lower than the levels seen in February 2020.
While the value of all retail sales increased by 4.2% compared to the previous year and by 0.5% compared to October, it is important to note that these figures do not account for inflation. With inflation currently running at double digits, the increase in value actually represents a decline in real terms.
When looking at the total volume of sales, there was a significant decrease of 5.9% compared to November 2021, and a slight decline of 0.4% compared to October. However, there were some positive signs within specific sectors. Department stores saw a small boost in sales volumes, up by 1.7% from the previous month. Clothing store sales volumes also experienced a modest increase of 2.1%. While any growth is encouraging in the current challenging retail landscape, a 2.1% increase is not particularly significant and is likely a result of discounting efforts rather than exceptional sales.
Analysts have voiced concerns about the weak figures and what they mean for the future. There is a discrepancy between increasing values and decreasing volumes, suggesting that consumers are willing to spend but are receiving less for their money. The month-long period of discounting in November, including Black Friday, may have provided a slight uplift in revenues, but it is unlikely to have a significant impact on retailers’ bottom lines.
A fall in consumer confidence prompted many retailers to start heavy discounting well before Black Friday in an attempt to encourage early Christmas spending. However, it remains uncertain whether retail sales will remain steady in December, as consumers are now cutting back on discretionary spending.
Looking ahead, as Boxing Day sales arrive, consumers may prioritize discounted goods in an increasingly competitive promotional landscape. Price-sensitive consumers will continue to seek value and affordability throughout 2023. In addition, inflationary pressures are expected to persist, and retailers selling non-essential items may face challenges due to weakened consumer spending power.
Overall, the weak retail sales figures for November highlight the ongoing challenges facing the UK retail sector. As consumer confidence and discretionary spending decline, retailers will need to navigate a competitive landscape while offering value and affordability to attract customers. The impact of inflation and ongoing promotional strategies will continue to shape retail sales performance in the coming months.
Useful Links:
1. Office for National Statistics (ONS) – Retail Sales Bulletin
2. BBC News – UK Retail Sales Fall in November
