Posted By Uma Rajagopal
Posted on December 3, 2024
LONDON (Reuters) – British retailers reported lacklustre sales in November, according to industry data on Tuesday affected by the timing of the Black Friday sales, although it still pointed to weakening consumer confidence.
Sales volumes dropped by 3.3% in the 12 months to November, the weakest reading since April when they fell 4.0%, and below an increase of 0.6% in the year to October, the British Retail Consortium said.
Last month’s decline reflected the fact that this year’s data did not include Black Friday sales in late November, which will be reflected in the December numbers, though they were included in last year’s comparison.
“While it was undoubtedly a bad start to the festive season, the poor spending figures were primarily down to the movement of Black Friday into the December figures this year,” Helen Dickinson, the BRC’s chief executive, said.
Even so, low consumer confidence and rising energy bills have clearly dented non-food spending.
The regulated price cap on household energy increased by 10% in October.
The BRC said non-food sales fell 2.1% year-on-year in the three months to November, reflecting a decline in spending on winter clothing. Food sales increased by 2.4% in the same period.
British consumers have also had to contend with high interest rates from the Bank of England in response to a jump in inflation during 2022. The BoE is expected to keep interest rates on hold at 4.75% later this month after cutting Bank Rate in August and November.
Separate data from Barclays on Tuesday showed the biggest annual drop in essential spending in over five years, which contracted by 3.1% in November.
Barclays said the fall was due to a slowdown in supermarket spending, which decreased 1.8%. In contrast, spending on non-essential items rose by 0.8%, driven mostly by a 22.8% increase in spending on cinema tickets including for Gladiator II, Paddington in Peru and Wicked movies.
Overall, consumer spending on Barclay’s debit and credit cards fell by 0.5% in November, the first decline since July.
Understandably, a number of factors weighed on consumer spending in November, notably easing consumer confidence post-summer, and expectations that post-Budget, inflation and interest rates will stay higher in the coming months,” Jack Meaning, chief UK economist at Barclays, said.
Barclays said retail and overall transactions on Black Friday increased 9.5% compared to Black Friday 2023, with overall transactions reaching the highest so far this year.
(Reporting by Suban Abdulla, editing by Andy Bruce)
