Retailers are hoping for the last big shopping weekend before Christmas, although sales rose more than expected last month as shoppers snapped up Black Friday bargains and bought early Christmas gifts, official data shows.
New figures from the Office for National Statistics (ONS) suggest the grim retail winter may not be as grim as many fear. ONS data shows retail sales rose 1.3 percent in November, more than many had predicted.
Darren Morgan from the ONS said: “Retail sales rose sharply in November as big Black Friday discounts encouraged shoppers to buy.” retailers.
“Home improvement retailers, clothing stores and department stores posted strong sales last month, with computer stores, sporting goods stores, toy stores and beauty stores particularly benefiting from the impact of their Black Friday promotions.”
Sales at non-food stores, including clothing stores and department stores, rose 2.3 percent last month, up from 0.2 percent in October.
Retailers said the move was helped by Black Friday sales and deep discounts throughout the month as stores tried to attract more shoppers. Strong demand for furniture, in particular, fueled home improvement stores’ growth of 3.5 percent.
Grocery store sales rose 0.8 percent this month. Supermarkets recorded modest growth of 0.1 percent, while specialty stores such as butchers and bakers had a very strong month with growth of 8.5 percent thanks to early Christmas shopping.
The ONS also revised down its figures for October, reporting no growth in retail sales, having previously expected a decline of 0.3 percent.
Despite the unexpected rebound, retailers are hoping for a “last-minute attack” from consumers. Helen Dickinson, chief executive of the British Retail Consortium, said: “Many retailers were keen to give November sales a much-needed boost by launching Black Friday sales even earlier in the year.” spend on smaller luxuries.
“Retailers are expecting consumers to make last-minute trips to their favorite stores in the final days before Christmas.”
The ONS data contrasts with data from a retail survey conducted by the Confederation of British Industry (CBI), which found stores reported a steeper fall in sales towards the end of the year. Sales fell year-on-year for the eighth month in a row as “tight household finances and higher interest rates continue to weigh on consumer spending.”
Martin Sartorius, chief economist at the CBI, said: “The retail sector ended 2023 on a gloomy note as the ongoing decline in sales volumes intensified during the crucial holiday trading period.”
“Inventories were deemed “too high” compared to expected December sales, while orders from suppliers fell at the fastest pace since May 2020 during the year to December.”
“Looking ahead, retailers are bracing for a cold New Year’s Eve as sales fall even faster next month. Retailers are gloomy about the future of the sector in the new year, with companies expecting an even sharper fall in sales next month. They also expect sales to remain well below seasonal standards next month.
“Despite weak sales prospects and high inventory levels, retailers will continue to reduce orders in January.
A record rise in the country’s cost of living in 2024, as well as increases in business tax rates, will “increase pressure on the sector in the new year”, he warned.
Victoria Scholar, head of investments at Interactive Investor, said: “The Black Friday and Cyber Monday trading weekend provided a much-needed boost to the struggling retail sector, particularly homeware retailers, clothing stores and department stores. Supermarkets also benefited as shoppers stocked up on special foods and drinks for the holidays.
“Consumers, who are particularly price sensitive due to the cost of living crisis, took advantage of these discount opportunities and completed their Christmas shopping earlier than usual in November.
“While November saw a significant increase in spending compared to October, the broader trend continues to point to a slowdown in retail spending, with January likely to be an even tougher month for a sector increasingly reliant on discounts and markdowns.” Promotions that eat up profits.”
Source: I News
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