UK retail sales growth underwhelms as cost-of-living crisis hits Christmas spending

(Sharecast News) - UK retail sales grew by an underwhelming amount in November despite shops stepping up their discounts leading up to Black Friday, data from KPMG and the British Retail Consortium showed on Tuesday, as cautious consumers chose to delay their Christmas spending. The BRC-KPMG retail sales monitor for November showed that total retail sales increased by 2.7% in November. This was above the three-month average growth rate of 2.6% but below the 12-month average of 4.1%. In November of 2022, sales were up 4.2% on the month before.

In the three months to November, food sales growth slowed to 7.6% from 7.9% a month earlier and under the 12-month average of 8.4%.

Meanwhile, non-food sales were down 1.6% in the three-month period, compared with an average of 0.5% over the past 12 months.

"Black Friday began earlier this year as many retailers tried to give sales a much-needed boost in November. While this had the desired effect initially, the momentum failed to hold throughout the month, as many households held back on Christmas spending," said Helen Dickinson, chief executive of the BRC.

"Retailers are banking on a last-minute flurry of festive frivolity in December and will continue working hard to deliver an affordable Christmas for customers so everyone can enjoy some Christmas cheer."

Dickinson painted a gloomy picture for retailer heading into 2024, as they have to deal with a rise in business rates and costs from other new regulations.

"These combined with the biggest rise on record to the National Living Wage will mean retailers will have less capital to invest in lowering prices for their customers," Dickinson said.

Paul Martin, UK head of retail at KPMG, said the cost-of-living crisis had clearly "taken its toll on Christmas spending", and said to expected a "prolonger and well targeted period of discounting" with less than a month to go until the festive holidays.