UK: Retail sales drop in November despite discounting
loading...
Total retail sales in discretionary spend categories fell by -5.8 percent in November in the UK, according to BDO’s latest High Street Sales Tracker. Sales performance was particularly poor online, with sales down -7.8 percent. In store sales fell by 5.5 percent, with the fashion sector recording figures of -8.0 percent compared to November 2023.
Sophie Michael, Head of Retail and Wholesale at BDO, commented: “These results are disastrous for the retail sector, with just one more month of the so-called ‘Golden Quarter’ left. Despite the hype around events such as Black Friday and Cyber Monday, we’ve seen heavy and prolonged discounting throughout most of November, but this has failed to get consumers spending."
BDO’s latest report shows negative sales growth both in store and online, compared to a poor performance in November 2023, when overall sales declined -0.3 percent.
Footfall was down as well, reported the British Retail Consortium (BRC). Footfall across UK retail destinations dropped 4.5 percent compared to the same period last year, according to the latest BRC-Sensormatic report. “A later-than-usual Black Friday and low consumer confidence meant customers were hesitant to hit the shops. Storm Bert’s travel disruptions towards the end of the month compounded this decline, particularly in northern cities,” commented Helen Dickinson, Chief Executive of the BRC.
Retailers are optimistic that the festive season will bring relief. Andy Sumpter, Retail Consultant EMEA for Sensormatic, said that November’s figures did not account for Black Friday or the key Saturday following it. “These dates are tipped as some of the busiest for store shopping during peak trading,” he continued. “Retail store visits dipped in November as consumer confidence remains volatile, perhaps not helped by post-Budget spending jitters. However, all eyes now turn to December."
BDO's Sophie Michael said: “Should this sales trajectory continue into the final weeks of this year, retailers and particularly those operating within the discretionary spend category, will face an even tougher first quarter in 2025. The industry has been very vocal about the detrimental impact that some of the measures announced in the Autumn Budget will have on their cashflow and on their bottom line from next Spring. This sense of economic anxiety seems to have reached consumers too with the cost of living still higher than it has been in previous years and recent announcements about further rises to energy prices."
"Within this festive period, retailers also continue to face increasing competition for the consumer purse with many customers prioritising spend on leisure and hospitality experiences. As a result, the industry is calling on the government to take note and work with the sector and its supply chain to alleviate some of the upcoming heavy burdens as it looks ahead to a very rocky 2025.”