The start of the festive shopping season has seen a decline in retail sales, causing concern for retailers.
- Recent figures show a 3.3% drop in total sales for November, compared to a 2.6% growth in the same month last year.
- Food sales showed some resilience, increasing by 2.4% year-on-year, though this is below the average growth.
- Non-food sales have taken a hit, with a significant decline observed in online purchases.
- Retailers are hopeful for a delayed, rather than diminished, consumer spending spree as the holiday season progresses.
The retail sector is experiencing a challenging start to what is traditionally known as its ‘Golden Quarter’, as total sales in November have fallen by 3.3% compared to the previous year, according to the British Retail Consortium (BRC). This performance is also above the 12-month average growth rate of 0.5%, illustrating a significant downturn.
Specifically, food sales have managed to increase by 2.4% over the three months to November. However, this is a stark contrast to the 7.6% growth seen in 2023, and it falls short of the 12-month average growth of 3.7%. Such figures indicate a modest resilience in food sales amidst broader retail struggles.
Conversely, non-food sales have decreased by 2.1% over the same period, severely impacted by a 10.3% decline in online purchases. This downturn in non-food sales suggests a cautious approach from consumers, likely influenced by rising energy bills and low confidence levels.
Helen Dickinson, BRC’s chief executive, attributed part of the poor performance to the timing of Black Friday, which this year is included in December’s figures. She noted the influence of economic factors: “low consumer confidence and rising energy bills have clearly dented non-food spending.” She observed that spending on fashion items, particularly winter clothing, was weak as consumers delayed purchases, whereas health-related spending saw a boost due to seasonal ailments.
Linda Ellett from KPMG UK echoed these sentiments, acknowledging the underwhelming performance in November but expressing optimism that these figures did not include Black Friday week. She suggested that a savvy consumer base might still engage in spending during the promotional push towards the end of November, potentially compensating for earlier sales deficits.
The retail industry remains hopeful for a rebound in consumer spending as the festive season unfolds.
