UK Retailers Hit Hard: BRC Survey Reveals November Sales Plunge Amid Festive Season Jitters

UK retailers reported a sharp 3.3% year-on-year sales drop in November, the lowest since April, according to the latest BRC survey. The decline reflects calendar disruptions from Black Friday, rising energy costs, and waning consumer confidence.

Black Friday Timing Clouds November Sales Data

According to Reuters, the timing of Black Friday sales did impact British retailers' November sales figures, which were still underwhelming and pointed to a decline in consumer confidence, according to industry data released on Tuesday.

After increasing by 0.6% in the year leading up to October, sales volumes decreased by 3.3% in the 12 months ending in November, according to the British Retail Consortium. This was the worst figure since April, when they fell by 4.0%.

Black Friday sales in late November were not included in this year's figures, which is why last month's fall was evident. However, when comparing to the previous year, those sales were included, so they will be reflected in the December numbers.

Consumer Confidence and Energy Costs Impact Retail Sales

"While it was undoubtedly a bad start to the festive season, the poor spending figures were primarily down to the movement of Black Friday into the December figures this year," BRC chief executive Helen Dickinson stated.

"Even so, low consumer confidence and rising energy bills have clearly dented non-food spending."

October saw a 10% hike to the regulated price cap for home energy.

In the three months leading up to November, non-food sales dropped 2.1% year-on-year, according to the BRC. This was due to a decrease in expenditure on winter apparel. During that time, there was a 2.4% increase in food sales.

Barclays Data Highlights Spending Shifts

As a result of a spike in inflation in 2022, the Bank of England imposed hefty interest rates on British consumers. Interest rates will likely remain unchanged at 4.75% later this month, following cuts to Bank Rate in August and November, Investing.com reports.

On Tuesday, separate data was released by Barclays revealing that essential spending fell by 3.1% in November, the largest yearly drop in over five years.

Supermarket spending slowed, falling 1.8%, according to Barclays. Movie tickets, notably those for Gladiator II, Paddington in Peru, and Wicked, increased by 22.8%, driving the 0.8% increase in expenditure on non-essential items.

November saw the first monthly drop in expenditure on debit and credit cards issued by Barclay's since July, a loss of 0.5%.

Black Friday Boosts Transactions Despite Broader Decline

"Understandably, a number of factors weighed on consumer spending in November, notably easing consumer confidence post-summer, and expectations that post-Budget, inflation and interest rates will stay higher in the coming months," Jack Meaning, Barclays's chief UK economist, stated.

Black Friday had a 9.5% increase in retail and overall transactions compared to Black Friday 2023, according to Barclays. Overall, Black Friday sales were the biggest thus far this year.