GBP: cost-of-living takes its toll on Christmas spending
Retail sales rose by only 2.6% in November according to the British Retail Consortium. With a UK inflation rate at 4.6%, this means that sales in volumes declined for a 22nd consecutive month.
(AI Video Transcript)
The UK retail market
The UK retail market had a slow month in November, despite the sales frenzy of Black Friday. The British Retail Consortium (BRC) reported that sales in their member stores grew by 2.6% compared to the previous year, which is the same rate as the previous month. However, this growth is much lower than the 4.1% increase seen a year earlier. It's important to note that this data does not take into account inflation, which has been estimated at 4.6% in the UK. This suggests that people are actually buying fewer goods.
The BRC survey
The BRC survey shows that the high cost of living is impacting Christmas spending, as many households are cutting back on non-essential purchases. However, there was some growth in sales for food and drink, as well as personal care products. On the other hand, sales of expensive items declined, indicating that people are being more careful with their discretionary spending.
Separate data from Barclays also showed a slight increase in consumer spending on payment cards. In November, spending grew by 2.9% compared to the previous year, up from 2.6% growth in October. This could be attributed to the longer Black Friday sales and people starting their Christmas shopping earlier than usual.
The extended Black Friday sales
Overall, the retail sales data for November paints a mixed picture for the UK. While there was some growth in essential categories, the overall sales growth was slow, suggesting that many households are feeling the impact of the high cost of living and are spending less on non-essential items. The extended Black Friday sales and early Christmas shopping have provided a small boost to consumer spending, but it doesn't seem to be enough to counter the overall slowdown in sales growth.
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