Black Friday fails to stop UK retail sales decline in November

Black Friday and the associated discounts leading up to it are typically expected to boost retail sales significantly. However, official statistics released on Friday indicate that in the UK, this wasn't the case. Retail sales volumes actually fell by 0.1% in November compared to October, contrary to analyst expectations of a 0.4% month-on-month rise. This poor performance followed an already negative trend, as sales had previously dropped by 0.9% in October.

The month also saw a specific reduction in online shopping, with shoppers pulling back from non-store retailing. The Office for National Statistics (ONS) figures, while providing a snapshot of the economy, are not without their limitations. The data frequently undergoes revisions, and the ONS itself now emphasizes quarterly readings over monthly ones, stating that monthly fluctuations are often too volatile for meaningful analysis. Additionally, headline figures no longer include a value-based percentage.

Despite these caveats, the data provides several key insights. While sales volumes dipped marginally on a month-on-month basis, the broader picture shows a slight increase over the quarter. Volumes increased by 0.6% in the three months ending in November compared to the preceding three months (the quarter ending in August). Furthermore, the quarter saw a 0.7% increase compared to the same period in 2023. However, sales volumes remain significantly below pre-pandemic levels, having fallen by 3% compared with February 2020.

Sector-specific performance varied, with clothing stores maintaining a strong performance over the three-month period. Online retail also captured a larger overall share of sales, yet the total volume of non-store retail activity fell by 2.9% for the month and 0.8% for the three months, indicating a broader pullback in purchasing despite Black Friday promotions.

Analysts reacted strongly to the figures, interpreting them as further evidence of economic strain. Jonathan Moyes, Head of Investment Research at Wealth Club, described the results as "another grim reading on the health of the UK economy." He specifically criticized government policy, stating that "The credit for these numbers will surely go to the Chancellor, who spent much of the month running what little confidence the UK consumer had into the ground." Moyes added that "higher taxes will only make matters worse, potentially hampering economic growth and risking an economic doom loop."

Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, provided additional context for the poor performance. She attributed the decline to "speculation around potential tax hikes and the wettest weather seen this year." Baker concluded that "The drop in sales compounded a bleak start to the all-important Golden Quarter, not even Black Friday deals could entice shoppers to splurge ahead of Christmas, with the biggest fall in online."