Early Black Friday fizzles out with lacklustre November retail sales

Total UK retail sales grew by 2.7% in November, according to figures from the British Retail Consortium (BRC) and KPMG. However, this was against a growth of 4.2% in November 2022. 

The latest figures are above the three month average growth of 2.6% but below the 12-month average growth of 4.1%, despite a large push from retailers around Black Friday.

Paul Martin, UK head of retail at KPMG, said the “limping” sales growth close to Christmas was evidence that the cost of living crisis was taking its toll on spending.

US revises strong Q3 GDP numbers upwards to 5.2%

“With two of the three months of the crucial golden quarter seeing sales growth below 3%, it has already been a weak Christmas trading period,” he said.

“Price remains the main purchasing driver, so we are likely to see a prolonged and well targeted period of discounting as retailers compete hard for a shrinking pool of spend and will need to clear stock,” Martin added, potentially having an even greater impact on already tight margins for retailers.

The challenging outlook could lead to further casualties in the retail sector, particularly pure online players facing more than 28 months of consecutive sales decline.

Online non-food sales fell again in November, decreasing by 2.1%, against a more modest decline of 0.4% for the same time a year ago, though this is a slight improvement on its three month decline of 2.8%.

The proportion of non-food items bought online decreased to 41.4% in November from 41.6% a year ago. 

In contrast, food and drink, health, personal care and beauty categories continued to drive what retail growth there was last month.

Food sales increased 7.6% over the three months to November, coming in below the 12-month average growth of 8.4%, but still representing growth year-on-year.

Jewellery and watches saw the biggest decline in sales on the high street, which the researchers said suggested consumers are abandoning expensive presents in favour of more budget-friendly gifting.

Eurozone inflation drops to 2.4%

Non-food sales overall decreased 1.6% over the three-months to November, compared to a 12-month average growth of 0.5%, and was also in decline year-on-year.

In-store non-food sales decreased 0.8% compared to November 2022, while also falling below the 12-month average growth of 0.6%.

Helen Dickinson, chief executive of the BRC, said retailers’ decision to begin Black Friday earlier this year gave sales a boost at the start of November, but the momentum had failed to hold throughout the month, as many households held back on Christmas spending.  

Looking ahead to 2024, Dickinson said retailers “will have to shoulder many new cost pressures”, including a rise to business rates and wages.

“These combined with the biggest rise on record to the National Living Wage will mean retailers will have less capital to invest in lowering prices for their customers.”