The start of the crucial holiday shopping season brought mixed results for UK retailers, as November sales figures fell short of expectations. Despite stores launching Black Friday promotions early in an effort to jumpstart spending, overall retail sales volumes rose a meager 0.2% month-on-month according to data from the Office for National Statistics (ONS). Economists had forecast a more robust 0.5% increase.
Lackluster Results Dampen Hopes for Strong Q4
The disappointing November numbers come on the heels of a 0.7% sales slump in October, marking an inauspicious beginning to the retail sector’s “golden quarter” – the final three months of the year when many high street chains traditionally earn the bulk of their annual profits. Retailers had hoped that by extending Black Friday discounts, which this year coincided with payday for many consumers, they could spur a surge in pre-Christmas spending.
Full Impact of Black Friday Still Unknown
However, with Black Friday itself falling on November 29th, the latest ONS figures – which cover the four weeks from October 27th to November 23rd – only captured a portion of the event’s impact. The true measure of whether extended Black Friday deals paid off won’t be known until December’s retail sales report next month.
“Despite many retailers launching Black Friday offers early, November trade got off to a slow start which dragged on for most of the month.”
– Jacqui Baker, Head of Retail at RSM UK
Clothing Retailers Hit Hard as Discretionary Spending Wanes
Not all retail categories fared equally in the lackluster November results. Clothing store sales proved especially weak, tumbling 2.6% month-on-month to reach their lowest level since January. Fashion retailers reported that economic headwinds were taking a toll on sales as consumers pulled back on discretionary purchases.
- November clothing sales down 2.6% month-on-month
- Clothing volumes hit lowest level since January
- Retailers cite tough economic conditions weighing on demand
Mixed Results Across Retail Sectors
In contrast, household goods stores saw an uptick, with furniture retailers in particular receiving a boost. Food sales also grew for the first time in three months, rising 0.5%, driven primarily by stronger supermarket sales.
| Retail Category | Monthly % Change |
|---|---|
| Food Stores | +0.5% |
| Non-Food Stores | +0.2% |
| Clothing Stores | -2.6% |
| Household Goods Stores | +1.3%* |
Quarterly Growth Remains Muted
From a broader perspective, retail sales volumes inched up just 0.3% in the September-November period compared to the previous quarter. This modest underlying growth trend reinforces that UK consumers remain cautious in their spending against a backdrop of soaring living costs and an uncertain economic outlook.
As the retail industry awaits December’s crucial figures to assess the outcome of this year’s elongated Black Friday push, analysts say one clear takeaway is that heavy discounting has become essential for enticing increasingly budget-conscious shoppers. However, this promotional strategy also threatens to further compress already thin profit margins in the brutally competitive retail landscape.
Heading into 2024, the key question is whether UK households facing a historic cost-of-living crunch will maintain sufficient confidence and purchasing power to deliver the retail sector a much-needed boost. With the economy expected to tip into a recession, it appears British high streets are far from out of the woods.
