Retail’s ‘golden quarter’ under pressure as sales disappoint again in November

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

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

This follows separate data from the Office for National Statistics which showed October retail sales fell 0.7 per cent from the previous month, as pre-Budget jitters weighed on spending.

A later Black Friday this year, which resulted in artificially weaker November figures, failed to mask figures suggesting it was “unlikely to be a great Christmas for everyone” as many consumers remain focused on budgeting, they suggest the analysts.

Total retail sales fell 3.3 percent year-on-year in November, down from 2.6 percent growth in November 2023.

Non-food store sales for the three months to November fell 2.2 percent year-on-year, down from a 2.2 percent increase in November 2023.

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

Food sales rose 2.4 percent year-on-year in the three months to November, up from a 7.6 percent rebound in November 2023.

BRC chief executive Helen Dickinson said: “While it was certainly a poor start to the festive season, the poor spending figures were mainly due to the carryover from Black Friday to December figures this year.”

He added: ‘Still, low consumer confidence and rising energy bills have clearly affected non-food spending.

‘Fashion spending was particularly weak as households delayed purchasing new winter clothing, while health spending was boosted by the arrival of seasonal coughs and colds.

“Retailers will hope that seasonal spending will be delayed, not reduced, and that customers will be able to spend in the remaining weeks until 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 vs 36 per cent) planning to spend what want this Christmas.

“However, despite this increase, it is unlikely to be a great Christmas for everyone as many remain budget-focused.”

“The festive optimism is there, but underlying caution means spending will continue to be influenced by economic pressures, especially on activities outside the home.”

Separate figures from Barclays showed consumer card spending fell 0.5 percent year-on-year in November, marking the first drop since July.

Essential spending fell 3.1 percent, its steepest drop in more than five years.

But entertainment spending rose 10.8 percent, and bookings for Gladiator II, Wicked and Paddington in Peru saw movie spending rise 22.8 percent year-on-year.

The Barclays Consumer Spending report also showed that retail saw a lull in the run-up to the seasonal sales period after a three-month growth streak, with a 2 per cent drop as the cold snap November hindered the flow of people on the main streets.

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 economist at Barclays in the UK, said: “Understandably, a number of factors weighed on consumer spending in November, particularly the decline in consumer confidence after the summer, and expectations of that, after the budget, inflation and interest rates will remain higher in the coming months.

“Looking ahead, the degree to which we see a seasonal rebound around Black Friday and Christmas will serve as a good test of the economy going into 2025.”