Retail sales values in the UK grew 0.4 per cent on a like-for-like (LFL) basis last month as consumers postponed Christmas amid caution over excess spend, according to figures released today.
On a total basis, sales in November rose 1.8 per cent on the same month last year, the BRC-KPMG Retail Sales Monitor revealed though shoppers reluctant to buy food ahead of the gift buying season saw food sales slow.
On a quarterly basis, food declined in real terms while online sales also disappointed, up 7.5 per cent last month on November 2011, remaining flat from October.
“November was a cautious month of wait and see,” explained David McCorquodale, Head of Retail at KPMG.
“The like-for-like indicators in food and non-food are positive but only just, against a weak set of comparatives last year.
“It appears that consumers know they have to spend before Christmas but are holding off for as long as they can to see if there might be bargains available in the next few weeks.
“Retailers meanwhile are trying to hold firm to maintain their margins but, if volumes don’t pick up significantly in the next two weeks, some will bow to the pressure to clear stocks before the year end and cut their prices.”
LFL rises in clothing and children’s footwear during the first week of last month highlight the ongoing financial struggles of many British households, McCorquodale noted, as such necessities are only purchased immediately after payday and it is hoped that the Government will use this week’s Autumn Statement to alleviate pressures.
“Much is hoped for from the Chancellor’s Autumn statement but in the meantime, retailers enter December in a state of nervousness due to weak top-line growth and pressure on margins,” McCorquodale said.
“Pricing throughout the month and strategic promotions will be fundamental in a key month.”
While leading supermarkets and high street retailers are expected to frantically offer deals and reductions ahead of the traditional sales period, consumers continue to be seduced by the latest technological offerings whatever their budget and many shoppers purchased the latest items early to avoid disappointment.
Stephen Robertson, Director General of the British Retail Consortium (BRC), warned that the findings have increased pressure on nervous retailers.
“Sales growth slowed as November unfolded, suggesting that customers are taking care not to spend too much too soon,” he said.
“Overall, the emphasis continued to be on value with consumers looking at lower priced gifts. The same caution hit online sales, which delivered their third worst performance of the year.
“With consumers conscious that there will be a full shopping weekend immediately before Christmas, retailers are holding their nerve and counting on a last minute rush in the crucial final weeks.”