How The High Street Fared In November
High Street retailers have hit the headlines once again as the retail sales statistics for November 2018 went live today (20th December 2018).
The main points included:
+ In the three months to November 2018, the quantity bought in retail sales showed an increase of 0.4% when compared with the previous three months due to growths in non-food stores and online retailing.
+ The quantity bought in November 2018 when compared with October 2018 increased by 1.4%, with a strong monthly growth of 5.3% in household goods stores.
+ Strong growth of 5.3% in household goods stores provided the largest contribution to overall growth within non-food stores.
+ Retailers reported strong growth on the month due to Black Friday promotions in November, which continues the shifting pattern in consumer spending to sales occurring earlier in the year; the non-seasonally adjusted growth rate in November 2018 was 13.2% in comparison with 8.7% in November 2013.
+ In November 2018, online sales as a proportion of all retailing exceeded 20% for the first time, with all online retailing accounting for 21.5% of total retailing on a non-seasonally adjusted basis.
‘Retailers rely on the final ‘golden quarter’ to boost their annual revenues and profits – and in some cases to ensure their survival. Given some of the recent warnings, we were expecting today’s figures to be bleak. In fact, they were slightly better than we’d anticipated, with retailers reporting a 5 per cent year on year rise in the amount spent by shoppers, reflecting the impact of Black Friday promotions.
‘Online Black Friday promotions helped push up online sales as a proportion of overall retailing to their highest ever level. In November, online sales accounted for 21 per cent of all retailing spend, breaking the 20 per cent barrier for the first time. However, the rate of growth in Black Friday sales overall appears to have slowed slightly this year.
‘Today’s headline figures mask a disappointing performance from clothing and footwear stores, where the month on month growth in spending was very subdued – up just 0.3 per cent. By contrast, spending on household goods such as homeware, jewellery and leisure goods was slightly healthier rising 1.1 per cent.
‘Looking ahead, there continue to be clouds on the horizon. With fewer than 100 days to go before Brexit, and with the Government having triggered their no-deal contingency plans, consumer sentiment could be hit. On the upside, petrol prices are falling and wage growth is now tracking one percentage point higher than price inflation. As a result, consumers may have a little more disposable income to play with. Whether this will translate into higher spending remains to be seen.
‘With some retailers experiencing softer than hoped for November sales, many will now be discounting heavily in order to convert stock into sales to ensure their survival going into 2019.’
Retailer Sir John Timpson expressed his opinion in a report to revive the UK’s High Streets. He told the BBC that Britain has twice as many shops than it actually needs and that town centres need to community hubs and meeting places. He added that councils should take the lead and that “planning must be made simpler and quicker”, echoing what Mary Portas said when she reviewed the British High Street seven years ago.
Despite all the closures and poor sales figures November’s figures reveal that physical stores are still raking in 78.5% of all retail sales. Consumer habits are changing, however those that offer the best service, product, price and experience will continue to thrive.