Retailers failed to benefit from a big Black Friday boost last month, with cautious consumers holding back unless they saw a spectacular bargain.
That’s the verdict from the British Retail Consortium (BRC), which said retail sales in November increased by just 0.6% on 2016 on a like-for-like basis.
On a total basis, sales rose 1.5% in November against 1.3% the previous year, in line with the three-month average of 1.4%.
“This year’s Black Friday has demonstrated that in such a tough economic environment, consumers have become ever more careful, willing to wait and deploy their discretionary income only when they see an exceptional bargain,” said British Retail Consortium chief executive Helen Dickinson.
Challenging festive period
“That heralds a challenging festive period ahead for retailers and shoppers alike.
“With current conditions likely to persist into next year, the government needs to do all it can to support the UK’s consumers, not least by securing a fair Brexit for them in the forthcoming trade negotiations.”
The joint BRC/KPMG survey showed a continuing shift from bricks-and-mortar sales to online shopping.
Over the three months to November 2017, in-store sales of non-food items declined 3.0% on a total basis and 3.7% on a like-for-like basis. On a 12-month basis, the total decline was 2.2%, the deepest since our records began in January 2012.
Online sales up
In contrast, online sales of non-food products grew 6.5% in November, although that was below the three-month and 12-month averages of 7.3% and 8.0% respectively.
Online penetration rate increased from 26.3% in November 2016 to 27.4% in November 2017, the highest on record.
“That’s not to deny that Black Friday was a significant event,” added Ms Dickinson.
“Sales of non-food products that week were over 40% higher than in the other weeks of the month, while it was the biggest week ever for non-food products online.
“However, rather than increasing overall sales, the event has shifted spending away from other parts of the festive period, and focuses shoppers’ attentions online and away from stores.”
Paul Martin, head of retail at accountants KPMG, said, “Retailers will be wondering whether the juice is worth the squeeze, with Black Friday sales resulting in a meagre 0.6% uptick in like-for-like growth, when compared to November last year.
“In what remains of this year, the difference between success and failure will be akin to retailers walking a tightrope. Retailers would be wise to focus on differentiation, personalisation and ensuring the availability of their products in the coming weeks.”