Food stores sales increased for the first time in three months in November as supermarkets in particular gained some crucial momentum in the build up to Christmas.
Food store volumes grew 0.5% between October and November, according to the Office for National Statistics (ONS), although online suffered a 2.9% decline.
It was a mixed picture across different sectors with a tough month for clothing meaning total retail sales rose less than expected.
The quantity of goods bought rose 0.2%, less than the 0.5% rise predicted by economists polled by Reuters. These figures were likely affected by schools’ half term falling in November rather than October, although ONS made seasonal adjustments for Black Friday falling in December rather than November.
November is a crucial month for retailers in the build-up to Christmas but these figures have raised further questions about the state of the economy. When compared with pre-pandemic sales in February 2020, volumes are down 1.6%.
“The UK consumer appears to be limping towards the finish line in 2024,” said Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club.
“Online sales were weak across the board and there was little Christmas cheer on offer for clothing retailers. The 2.6% decline in clothing sales in November means clothing sales volumes are at their lowest in almost three years. With clothing often the first category consumers cut back on in difficult times, this is not a good omen.”
These numbers will give “little festive cheer for retailers,” agreed Alex Kerr, UK economist at Capital Economics, who pointed out sales are still on course to decline in the October to December period.
“Given that October’s 0.7% month-on-month fall in sales volumes appeared to be driven by households spending cautiously ahead of possible tax rises in the Budget and that the Chancellor avoided large personal tax rises, it is somewhat encouraging that sales volumes rebounded in November.”
“But sales at department stores fell by 0.9% and sales at clothing stores followed October’s 3.5% drop with a further 2.6% decline as households continued to delay spending on winter clothing. And fuel sales fell by 0.7%, probably as petrol pump prices rose by 0.9%.”
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