UK retail sales showed a surprise fall last month as household budgets remained under pressure from rising prices.
Economists had expected to see growth of 0.3% after strong sales around Black Friday, but the latest report from the Office for National Statistics (ONS) reveals that sales volumes across the whole of November declined by 0.4% compared to October.
Sales were down in every major retail category except food. Sales volumes in food stores rose by 0.9%, with retailers reporting that customers were stocking up early for Christmas to help spread the cost.
When compared with pre-pandemic levels, total retail sales in November were 14.8% higher in value terms, but volumes were 0.7% lower.
A separate measure of consumer confidence compiled by GfK showed a slight improvement but remained near a record low level.
Respondents remained concerned about the outlook for their personal finances over the next 12 months, suggesting a cautionary approach to non-essential spending in 2023.
“Despite the latest GDP figures showing slight growth in October, the warning is of a tough road ahead and that the UK is not out of the recessionary woods,” said Joe Staton, client strategy director at GfK.
“Real wages are falling as inflation continues to bite hard, further straining the discretionary budget of many households as we enter the last few shopping days before Christmas.”
Helen Dickinson, chief executive of the British Retail Consortium, noted that consumer confidence “remains well below levels seen even at the height of the pandemic due to the ongoing cost of living squeeze”.
Dickinson added that many retailers will be “holding their breath” as they look to the hugely important December sales period.
