MNI DATA: UK November Sales Moderate Despite Black Friday: BRC

UK Nov Like For Like Retail Sales -0.5% Y/Y Vs Oct +0.1%

By Jamie Satchi

     LONDON (MNI) - The pace of UK consumer spending slowed in November, despite

online sales penetration hitting an all-time high, a survey published Tuesday

showed.

     The British Retail Consortium Retail Sales Monitor reported November

like-for-like sales down 0.5% on the year, below the 0.1% y/y seen in October

and the 0.6% showing in November 2017.

     Total sales did rise in November, up 0.5% y/y, but this pace was markedly

lower than October's 1.3% reading and the 1.5% result recorded this time last

year.

     --BLACK FRIDAY EFFECT MUTED

     The data suggested households were reluctant to take to the high street

despite the heavy Black Friday promotions, pointing to a limited boost to retail

sales in the closing months of the year. 

     "Black Friday week itself was bigger than last year, but did little to lift

the overall pace of spending, with sales growth in November falling to its

lowest rate in seven months," Helen Dickinson OBE, Chief Executive, British

Retail Consortium said. 

     UK households, since the EU referendum, have had their savings eaten into

and may be prioritising the restoration of these precautionary buffers, putting

discretionary spending on the back-burner for now.   

     "Weak consumer demand and falling confidence mean that retailers are in for

a nerve-wracking run up to Christmas," she added. 

     The BRC report did stress, however, that the full effect of the

promotion-laden weekend, which includes both Black Friday and Cyber Monday, will

not be realised until next month.   

     --RECORD-HIGH ONLINE ACTIVITY 

     While overall sales figures were softer than in recent years, a record-high

proportion of sales were secured online. The online penetration rate increased

from 32.6% last year to 33.8% in November 2018, an all-time high. 

     Put in other words, one of every three pounds spent on non-food items was

spent online.  

     Even still, THE online performance versus last year was not markedly

higher.

     --TECH THE WINNER

     Electronic items were the best performer last month, with evidence from the

survey that demand was driven by both discounts but also a slew of new releases.

     Accompanying computing goods, food, other non-food goods and furniture all

performed better in November, on a total basis, versus October. 

     --MARGINS SQUEEZED

     Meanwhile, Sue Richardson, Retail Director at KPMG, highlighted concerns

over the health of retailers who adopted aggressive discounting.

     "Sales growth and profitability don't necessarily go hand-in-hand,

especially against a backdrop of deep discounting, so in this environment a

laser-like focus on margin and cost base is absolutely essential," she said. 

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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