UK retail sales weak in November, shoes shine, but clothing increase is small

By

Sandra Halliday

Published
Dec 16, 2022

There may have been lots of talk about a buoyant Black Friday last month, but official figures from the UK’s Office for National Statistics on Friday showed that retail sales volumes in November actually fell compared to October. Non-food stores sales volumes fell by 0.6% and were 1.8% below February 2020 levels.

And while the latest IMRG-Capgemini report this week has pointed to a slight uptick online among the e-tailers it surveys, the ONS figures showed non-store retailing (predominantly online retailers) volumes fell by 2.8%.

Looking at the figures in more detail, the ONS said that the value of all retail sales was up 4.2% last month, compared to a year ago and it was up 0.5% compared to the previous month. But while that looks positive, it has to be remembered that inflation is running in double digits, so any value increase below the inflation rate is actually a real-terms decline. 

Meanwhile, the total volume of sales was down a hefty 5.9%, compared to a year ago and down 0.4% compared to October.

There was a small crumb of comfort for department stores with sales volumes up by 1.7%, compared to the previous month, while clothing store sales volumes rose by 2.1%. While any increase given the current weak backdrop is encouraging, 2.1% is a far from stellar figure and means clothing stores aren’t exactly having a bumper time at the moment as higher volumes are likely to have come as a result of discounts. 

The ONS said that the increase was mainly because of growth in footwear stores and overall, the clothing category remained 2% below the pre-pandemic level of February 2020.

Analysts highlighted the weakness that the figures clearly show and expressed concerns about what it means for this month and beyond. Jacqui Baker, partner and head of retail at leading audit, tax and consulting firm RSM UK, said: “With values increasing but volumes dropping, [it] shows consumers are willing to go out and spend but are getting a fraction of what they used to get for their money. Black Friday was not quite the bonanza retailers were banking on. What was meant to be a weekend of offers has turned into a prolonged period of discounting throughout November, which may provide a slight boost to revenues, but will have little impact on bottom lines.”

Silvia Rindone, EY UK&I Retail Lead, added: “Falling consumer confidence has meant many retailers started heavy discounting well-ahead of Black Friday to entice shoppers to bring forward their Christmas spending. While this may have worked in the short term, it’s questionable if retail sales will hold firm in December. Shoppers are now cutting back on discretionary spending.”

And Oliver Vernon-Harcourt, head of retail at Deloitte, said: “As Boxing Day sales kick off the traditional end-of-season discounting period, consumers could double down on discounted goods amidst what is likely to be an increasingly competitive promotional environment. Price-sensitive consumers will continue to look for value and affordability through 2023 [and] inflationary pressures look set to linger for the foreseeable future. As retailers try to clear their stock, some will be more exposed to weakening consumer spending power, particularly those selling non-essential items.”