MNI REALITY CHECK: UK Nov Sales Lower, But Not All Bad News

Widespread lockdowns in the UK dampened non-essential retail sales in November, but early Christmas shopping and buoyant food sales may have prevented some of the nosedive in sales predicted by City forecasters, leading industry sources tell MNI.

Retailers reported extremely busy trading over the early days of the month, with consumers accelerating Christmas shopping after the 31 October announcement of the closure of non-essential stores, effective 5 November.

SALES SHIFTED

Some of that pre-holiday buying shifted to supermarkets, where shoppers stocked up on decorations and holiday food. Industry groups reported a surge in food-store sales, boosted by purchases of turkeys and creme liqueurs.

"Sales of turkey are up … Shoppers spent 238% more on Christmas lights … suggesting that people are eager to capture the Christmas spirit at home," Fraser McKevitt at Kantar told MNI.

Supermarket sales were also boosted by the closure of bars and restaurants through much of November, with alcohol purchases soaring. Consumers spent a record high of nearly £11 billion at supermarkets, both in store and online over the month, according to Kantar.

ONLINE BOOST

Online sales of both food and non-food products skyrocketed, with consumers becoming ever more comfortable with digital shopping as the pandemic progresses. Black Friday discounting — usually concentrated toward the end of November — started much earlier in the month, further boosting electronic shopping activity. IMRG, the internet retailing association, reported a 58% jump in online receipts between October and November.

"Online retail has been buffeted" by the lack of spending opportunity elsewhere and could dip in coming months, according to Andy Mulcahy, IMRGs strategy and insight director.

In-store non-food sales suffered a sharp decline in November, with many stores open for only the first week of the month.

"Almost 80% of our [non-food] retailers sales" went to zero after the first week of November, Andrew Goodacre, ceo at the Independent Retailers' Association said.

APPAREL DOWN

Clothing sales, which remained nearly 14% below February levels in October, fell dramatically last month, according to industry leaders. Textiles, clothing and footwear comprised just over 11% of total sales before the pandemic.

"It was a tale of two channels however, as lockdown resulted in a dismal performance for high street retailers, whilst online sales rose by impressive double figures across most categories," according to Paul Martin, UK head of retail at KPMG.

Overall, it was a difficult environment for many traditional retailers.

"November saw the brakes put on sales growth that had been seen over the previous three months. In-store non-food sales saw a significant decline as a result of the lockdown … However the disparity between online and in-store non-food sales widened with the highest online penetration rate since May," BRC CEO Helen Dickenson said.

Analysts forecast a 4.1% plunge in sales volumes in November, more than reversing the 1.2% gain in October. However sales are expected to remain well above year-ago levels, with economists predicting a 2.4% annual gain, albeit slower than the 5.8% rise a month earlier.