Retail ‘golden quarter’ underneath stress as gross sales disappoint once more in November

Retailers faced lacklustre sales again in November as weak consumer confidence continues to weigh on the sector’s ‘golden quarter’. 

Non-food online shopping sales figures slumped by 10.3 per cent year-on-year in November, new data from the British Retail Consortium and KPMG Retail Sales Monitor shows. 

It follows separate data from the Office for National Statistics that showed October retail sales slumping 0.7 per cent on the prior month, as pre-Budget jitters weighed on spending.  

A later Black Friday this year, resulting in artificially weaker November figures, could not disguise figures suggesting it was ‘unlikely to be a bumper Christmas for all’ as many consumers remain focused on budgeting, analysts suggest. 

Total retail sales fell by 3.3 per cent year-on-year in November, against growth of 2.6 per cent in November 2023. 

In-store non-food sales over the three months to November slipped 2.2 per cent year-on-year, against an increase of 2.2 per cent in November 2023. 

The data covers the four weeks to 23 November 23 and, unlike last year’s data, does not include the Black Friday period. 

Down: Total retail sales fell by 3.3% year-on-year in November, BRC and KPMG data shows

Food sales increased 2.4 per cent year-on-year in the three months to November, against an upturn of 7.6 per cent in November 2023.  

BRC chief executive Helen Dickinson said: ‘While it was undoubtedly a bad start to the festive season, the poor spending figures were primarily down to the movement of Black Friday into the December figures this year.’

She added: ‘Even so, low consumer confidence and rising energy bills have clearly dented non-food spending.

‘Spending on fashion was particularly weak as households delayed purchases of new winter clothing, while health spending was boosted by the season’s arrival of coughs and colds.

‘Retailers will be hoping that seasonal spending is delayed, not diminished, and that customers get spending in the remaining weeks running up to Christmas.’

Sarah Bradbury, chief executive of analysts IGD, said: ‘IGD’s latest research highlights signs of festive cheer, with 5 per cent more shoppers than last year – 41 per cent versus 36 per cent – planning to spend what they want this Christmas.

‘However, despite this uplift, it’s unlikely to be a bumper Christmas for all, as many remain focused on budgeting.

‘The festive optimism is there, but the underlying caution means spending will still be influenced by economic pressures, especially on out-of-home activities.’

Separate figures from Barclays showed consumer card spending was down by 0.5 per cent year-on-year in November, representing the first decline since July.

Essential spending fell by 3.1 per cent, its steepest fall in more than five years.

But, spending on entertainment was up 10.8 per cent, with bookings for Gladiator II, Wicked and Paddington In Peru seeing cinema spending rise by 22.8 per cent year-on-year.

The Barclays Consumer Spend report also showed retail experienced a lull in the run-up to the seasonal sales period after a three-month run of growth, down 2 per cent as November’s cold snap hampered high street footfall.

Supermarket spending fell 1.8 per cent, as 64 per cent of consumers said they were looking for ways to reduce the cost of their weekly shop.

Jack Meaning, chief UK economist at Barclays, said: ‘Understandably, a number of factors weighed on consumer spending in November, notably easing consumer confidence post-summer, and expectations that, post-Budget, inflation and interest rates will stay higher in the coming months.

‘Looking ahead, the extent to which we see a seasonal bounce around Black Friday and Christmas will serve as a good test of the economy going into 2025.’