Retail sales accelerate in November as Christmas shoppers hit high street

UK retail sales picked up pace in November as shoppers hit the high street for early Christmas shopping and Black Friday, according to official figures.

The Office for National Statistics (ONS) said retail sales volumes increased by 1.4% for the month, accelerating from a 0.8% increase in October.

The reading was better than expected, with analysts having forecast that growth would remain steady at 0.8%.

The ONS said sales volumes across the sector were now 7.2% higher than their pre-pandemic levels from February 2020.

November was boosted by non-food sales in stores, which lifted by 2% for the month.

It highlighted that this was particularly boosted by 2.9% growth in sales at clothing stores, which saw sales surpass pre-pandemic levels for the first time.

Heather Bovill, deputy director for surveys and economic indicators at the ONS, said: “Retail sales picked up in November, boosted by strong Black Friday and pre-Christmas trading.

“Clothing stores fared particularly well and have exceeded their pre-pandemic level for the first time.

“Computer, toy and jewellery retailers also reported robust sales this month.

“With more consumers choosing to visit the high street and retail parks, the proportion of online sales continued on a downward trend, to their lowest level since March 2020.”

However analysts and retailers are looking ahead with caution as spiralling Omicron rates lead to consumers scaling back their Christmas plans and socialising which will dampen demand (particularly for bricks and mortar retail) and dent consumer confidence as we enter the new year.

"Much will weigh on consumer confidence remaining strong throughout the winter months, with supply chain issues, inflation and further COVID restrictions all posing the risk of disrupting consumer and retailer behaviours."

Deloitte head of retail, Oliver Vernon-Harcourt

Analysts' reaction

Deloitte Head of Retail, Oliver Vernon-Harcourt:

“November saw retail sales ramp up as the ‘Golden Quarter’ got into full swing, pushing sales values and volumes up month-on-month by 2.3% and 1.4%, respectively.

“Consumers took advantage of discounts on toys, clothing, and other festive items. Black Friday events drove spending as consumers picked up early Christmas deals, with clothing sales above pre-pandemic levels for the first time. No longer a one-day shopping extravaganza, for those retailers participating the promotional period typically stretched across more than a two-week period.

“Elsewhere, despite a big appetite for Christmas after lost celebrations last year, food sales volumes fell again month-on-month.

“Online sales in November continued to fall from a peak in February 2021, accounting for 26.9% of all retail sales. However, more consumers may be inclined to shop online as we get closer to Christmas to avoid busy or crowded areas given concerns around rising COVID-19 infection rates. Whilst we don’t yet know how in-store footfall will be impacted, a drop from usual levels for this time of year could cause headaches for bricks-and-mortar retailers. Those with strong online platforms may find themselves more resilient to any changes in consumer behaviour. Staff shortages are also threatening the retail sector as more and more workers are needing to self-isolate.

"Much will weigh on consumer confidence remaining strong throughout the winter months, with supply chain issues, inflation and further COVID restrictions all posing the risk of disrupting consumer and retailer behaviours. Retailers may find that, as end-of-season discounting begins, self-gifting could buoy overall retail sales into the New Year.”

Barclays Corporate Banking Head of Retail & Wholesale at Barclays Corporate Banking, Karen Johnson:

“Prices down. Sales up. Black Friday was exactly the success that the UK retail industry had been hoping for, and was a major factor in last month’s retail spending increasing by nearly 5% versus 2020. Yet it’s never that simple. Whilst clothing and ‘hair & beauty’ spend performed well in November (as people prepared for Christmas parties and other celebrations), early festive spend was nowhere near as strong as retailers expected.

“Moving forward, retailers will be concerned about the impact of the new Omicron variant on consumer confidence. Whilst concerns around Covid would normally drive consumers online, issues with delivery and product availability mean many could turn to the high street for their final items of Christmas shopping.

"Increasing costs are also on the mind of UK retailers, with each of them having to decide how much they will be able to absorb and how much will need to be passed onto the consumer.”