Retail sales drop on weaker online shopping; in-store spending increases

British retail sales dropped in November, hit by weaker online shopping despite Black Friday and the run up to Christmas, official data showed Friday.

Sales by volume fell 0.4 per cent last month after rising in October, the Office for National Statistics said in a statement.

“Retail sales fell overall in November, driven by a notable drop for online retailers, with Black Friday offers failing to provide their usual lift in this sector,” said Darren Morgan, ONS director of economic statistics.

“However, department stores and household goods shops did report increased sales with these retailers telling us a longer period of Black Friday discounting helped boost sales.”

Online retail sales volumes fell by 2.8 per cent in November, continuing a downward trend seen since early 2021, as the wider economy reopened and people could return to shopping in store.

Total retail sales had jumped 0.9 per cent in October, a figure skewed by a drop in September which saw a public holiday for the funeral of Queen Elizabeth II.

“The drop in retail sales in November suggests that consumers are buckling under the pressure of surging… inflation, despite additional government support for their energy bills,” noted Gabriella Dickens, senior UK economist at Pantheon Macroeconomics.

“Retailers likely will endure a further drop in demand in December due to the heavy snowfall” seen across the UK so far this month.

Charlie Huggins, head of equities at Wealth Club, commented that the figures are far from catastrophic, given the doom and gloom surrounding the UK economy.

“UK consumers may not be feeling flush with cash, but they are still spending at a similar rate to last year. Stores are faring better than online, probably aided by the Royal Mail strikes, and clothing sales in store rose, which doesn’t exactly suggest Armageddon,” Huggins said.

He noted that the crucial festive period, the first Christmas since the pandemic without any lockdown restrictions, may encourage one final spending splurge.

“The Royal Mail strikes should also continue to provide some festive cheer for traditional retailers, by encouraging more last minute shoppers into stores,” he added.

The British Independent Retailers Association has commented on the ONS sale data and said shoppers are “tightening their purse strings” as they prepare for the cost-of-living crisis to hit.

BIRA’s CEO Andrew Goodacre said: “The ONS data makes grim reading for retailers with Black Friday not even providing a boost that many large retailers hoped for. November (along with December) is a pivotal month for retail and based on these numbers form the ONS it looks as if Christmas has started late in the shops, especially for non food shopping. On-line dales are down again, suggesting that customers are continuing to come back to shops.

“These latest ONS figure confirm what everybody in retail already knew – Christmas has not yet arrived on the high street. The low sales, and even lower volumes of products sold, is extremely worrying for independent retailers throughout the UK. We can see the purse strings being tightened by consumers, and that will only become more prevalent in the new year. 2023 is going to be difficult for retail and high streets in general. Whilst I respect the need to control inflation, we also need the government to give some consideration to economic growth and improving consumer confidence,” he concluded