UK sees year-on-year drop in retail sales

This was, however, above the three-month average growth rate of 2.6% but below the 12-month average growth rate of 4.1%. Food sales, meanwhile, fell below the 12-month average of 8.4% –dropping to 7.6% worth of growth in the three months to November. 

Additionally, non-food sales decreased by 1.6% on a total basis over the three months to November – lower than the 12-month average growth of 0.5%. Broken down by retailer type, in-store non-food sales decreased by 0.8% while online non-food sales decreased by 2.1% for the three months to November.  

British Retail Consortium chief executive Helen Dickinson said: “Black Friday began earlier this year as many retailers tried to give sales a much-needed boost in November. While this had the desired effect initially, the momentum failed to hold throughout the month, as many households held back on Christmas spending.  

“Health and beauty products showed stronger growth, but non-food sales were down overall year on year. November had the highest proportion of non-food goods purchased online for 2023, though this remains below the previous years’ level. 

“Retailers are banking on a last-minute flurry of festive frivolity in December and will continue working hard to deliver an affordable Christmas for customers so everyone can enjoy some Christmas cheer. Looking ahead to 2024, retailers will have to shoulder many new cost pressures, including a rise to business rates, as well as costs from other new regulations.  

“These combined with the biggest rise on record to the National Living Wage will mean retailers will have less capital to invest in lowering prices for their customers.” 

KPMG’s head of retail in the UK Paul Martin added: “With the clock ticking down to Christmas, sales growth in November remained weak at 2.7%, despite a big push from retailers around Black Friday deals.  

“Food and drink, health, personal care and beauty categories continued to drive growth whilst jewellery and watches saw the biggest decline in sales on the high street, suggesting consumers are abandoning expensive presents in favour of more budget friendly gifting.  Online sales fell yet again, but penetration rates rose by 5% on October to 41.5% as consumers shopped around for Black Friday bargains. 

“With less than a month to go and sales growth limping along, the cost-of-living crisis has taken its toll on Christmas spending for many households, and the continued economic conditions are testing consumer resilience.   

“Price remains the main purchasing driver, so we are likely to see a prolonged and well targeted period of discounting as retailers compete hard for a shrinking pool of spend and will need to clear stock. 

“With two of the three months of the crucial golden quarter seeing sales growth below three percent, it has already been a weak Christmas trading period.  Any excess stock not sold before Christmas could be further reduced leading to big January sales, and potentially having an even greater impact on already tight margins.   

“As we look to the first few months of 2024, we can expect the challenges to continue which could lead to further casualties in the sector, particularly pure online players facing more than 28 months of consecutive sales decline.”