In a swift turn of events, the Office for National Statistics has unveiled a more optimistic outlook for UK retail sales in November, countering the gloomy assessment from the CBI just a day earlier.
The official statistics body reported a significant 1.3% upswing in retail sales volumes in November, marking a stark contrast to the stagnation observed in October. Notably, non-food store sales volumes experienced a notable 2.3% surge, attributed to early Black Friday promotions and increased markdowns. While this surge is encouraging, widespread discounting may pose challenges to profit margins for retailers.
Surprisingly, online retailers, pivotal to Black Friday sales, saw only a modest 0.2% increase in sales volumes in November, following a 0.5% rise in October.
Delving deeper, the ONS revealed that the value of retail sales in November rose by 1% compared to October and 3.8% higher year on year. However, the year-on-year figure should be viewed cautiously due to inflation running higher than 3.8%.
Excluding petrol and automotive fuels, the value of sales rose 1.2% month on month and an encouraging 5.7% year on year.
Focusing on non-food categories, the 2.3% volume rise indicates the significant impact of Black Friday on retail sales. Despite this boost, non-food store sales volumes remain 2.7% below pre-pandemic levels from February 2020.
Within the non-food sector, all sub-sectors experienced sales volume increases, with cosmetics stores exhibiting strong growth and clothing stores reporting a 1.3% uptick in November. Although overall online sales were not remarkable, textile, clothing, and footwear online stores witnessed a notable 10% year-on-year increase in value sales.
Helen Dickinson, Chief Executive of the British Retail Consortium, highlighted the boost in cosmetic sales, noting a 14.1% overall growth, thanks to the enduring influence of the «lipstick effect.» Jacqui Baker, Head of Retail at consulting firm RSM UK, emphasized the positive impact of Black Friday events on retail sales, signaling a much-needed uplift, especially amid consumer caution and considered spending choices.
In summary, the UK retail landscape experienced a welcomed surge in November, fueled by Black Friday promotions, the «lipstick effect,» and increased consumer confidence amid signs of economic recovery. Retailers, navigating cash-strapped times, leveraged early Black Friday offers to stimulate spending, resulting in a notable 1.3% increase in sales volumes.
