Thursday 19 December 2019 9:53 am

Retail sales dip in November despite discounting

Retail sales dipped last month as UK shoppers showed signs of “discount fatigue” in the run up to Black Friday and Cyber Monday.

The amount spent in the three months to November dropped 0.3 per cent compared to the previous three months.

Read more: Are there any signs retailers could be in for a merry Christmas this year?

In November, shoppers spent 0.5 per cent less than they did in October, according to the latest figures from the Office for National Statistics, adjusted to account for Black Friday falling later than last year.

Meanwhile, consumers bought less, with volumes dipping 0.4 per cent in the three month period and 0.6 per cent month on month, despite seasonal discounting starting earlier.

The retail sales sample period did not include Black Friday, which fell on the 29 November and outside the reporting time frame, however the ONS said the figures were seasonally adjusted to take the shift into account.

Aled Patchett, head of retail and consumer goods at Lloyds Bank Commercial Banking, added: “It’s disappointing that early discounting was not enough to get consumers spending to boost the coffers of many retailers in November.

“Instead, these figures add to the impression that 2019 has been a slow burn in terms of market growth.”

However, some analysts said shoppers could have been holding out for the sales event.

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “Disappointing figures from the retail sector in November but in its defence, with Black Friday coming at the end of the month and not covered by this reporting period, it’s reasonable to assume that many shoppers held on to their cash to splash out on the bargains to be had during that annual sales fest, particularly as it coincided with payday for millions of consumers.  

“Discounting in the run up to Christmas, such a crucial time for retailers’ fortunes, can be a risky strategy but those who have planned strategically and sensibly should report a better set of returns in the next update.”

Tom Leman, head of retail and consumer at law firm Pinsent Masons, said: “The decline in sales is symptomatic of the tough operating conditions that retailers have faced throughout the year, the key thing now is for the sector to adapt to consumer needs in order to ensure sustained levels of spending.

“Following the UK general election result, the value of the pound has risen which may alleviate some of the cost pressures on retailers with supplies sourced in euros or US dollars becoming relatively cheaper.

“It will be interesting to see how this filters through to retail pricing and how consumer purchase intentions change in the coming months now that there is greater certainty around Brexit.”

Read more: Wet weather dampens November retail footfall figures


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