NEWS

November UK retail sales jump more than expected

Published on: 21st December 2018

Retail sales jumped more than expected in November, helped by Black Friday promotions.

Official figures showed sales rose 1.4% from October, despite economists’ forecasts of about a 0.3% gain. But for the three months to November, which smooths out monthly volatility, sales growth was 0.4% on the previous quarter, the slowest rate since April.

Several retailers have warned of tough trading this winter. Sports Direct boss Mike Ashley said November was “unbelievably bad”, while Superdry and online retailer ASOS have also warned of dismal trading. The Office for National Statistics (ONS) said the changing nature of Black Friday sales promotions posed a challenge for the process of adjusting for seasonal variations.

Surveys from the British Retail Consortium and Barclaycard have suggested that households were continuing to shop cautiously in November. However, recently consumers have seen the fastest growth in underlying pay growth since 2008, with inflation falling to a 20-month low of 2.3%, according to ONS figures released earlier this week.

Thomas Pugh, UK Economist at Capital Economics, said the stronger spending could point to a weaker December, but that the longer term trend was more positive.

He said: “With inflation continuing to fall back… and pay growth on the up, there should be scope for consumer spending growth to gather some momentum further ahead. [The] big picture is that a continued acceleration in real earnings, assuming a Brexit deal is signed, should give household spending a boost next year.”

Philipp Gutzwiller, head of retail at Lloyds Bank Commercial Banking, said November data showed that “online is now truly coming of age”. He added: “More than perhaps any month before, the fact that overall sales rose in November was thanks to the relative success of Black Friday online compared with on the High Street.”

The most recent high street and shopping centre footfall data for November, compiled by Springboard, showed the worst decline since the recession.

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