Retail sales disappoint in November
UK retail sales values rose 1.8% on a like-for-like basis from November 2008, when sales had dropped 2.6%, due to turmoil in financial markets hitting consumer confidence.
On a total basis, sales rose 4.1% against a 0.4% decline in November 2008. Food sales growth slowed further, largely reflecting lower food price inflation. Clothing and footwear also slowed after October’s uplift. Homewares and furniture sales showed further gains, but against larger declines a year ago. Non-food non-store sales (internet, mail-order and phone sales) in November were 16.9% higher than a year ago compared with 18.0% in October. The slower growth rate in November than in October was in line with the slowdown in store sales.
Stephen Robertson, Director General, British Retail Consortium, said: “We would have expected much stronger growth because the comparison is with very poor results in 2008 when November was the second worst performing month of the year.
“Growth was weaker than a strong October, but it’s not as bad as it seems. A lot of this was down to the sharp fall in food inflation which continues to dampen food retailers’ sales. But non-food sales growth improved as the Christmas build-up began. In particular, discounts and downpours boosted boot and shoe sales – while the milder weather hit clothing sales. There was continued growth in non-store non-food sales.
“Consumer confidence is fragile and has taken a turn for the worse. We’re the only major economy still in recession. Uncertainty over jobs and future tax increases and Government spending cuts is making customers more cautious. Retailers are hopeful of a better Christmas than last year’s dire performance, but it’s still all to play for.”
Helen Dickinson, Head of Retail, KPMG, added: “On the face of it, a disappointing result for November given that October showed the best like-for-like growth since 2002. However, once the fact that food sales growth slowed further is factored in, largely reflecting lower food price inflation, it represents a solid start to Christmas trading. Clothing did suffer on the back of poor weather and comparisons with 2008 when more ‘discount days’ were held by a number of the large multiples. Furniture and flooring and other home related sectors had another good month reflecting a combination of pent up demand and the focus on the home this Christmas. Although regaining ground lost in the early run up to Christmas is difficult, if not impossible, many retailers will be quietly confident that their performance will not be anywhere near as bad as some may have expected six months ago.”
