By Marcus Leach
UK retail sales values were 1.6% lower on a like-for-like basis from November 2010, when sales had risen 0.7%. On a total basis, sales were up only 0.7%, against a 2.8% increase in November 2010. On both measures, sales performance was the weakest since May.
Food sales growth was little changed from October's 5-month low. Non-food sales fell further below their year-earlier level, with sales largely promotion-led. Clothing and footwear sales were hit by the mild weather, as well as by underlying uncertainty about jobs and incomes. Consumer caution continued to hit big-ticket homewares and furniture purchases most.
Non-food non-store (internet, mail-order and phone) sales growth fell back in November after picking up in October. Sales were 8.6% up on a year ago, the weakest since March and half the previous November's increase.
"There's a worrying lack of cheer in these figures. The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending, despite Christmas being so near," Stephen Robertson, Director General, British Retail Consortium, said.
"This November's mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard. Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting. Retailers hope that customers who've managed their finances carefully in recent months will still treat themselves and their families in December, unhampered by the severe weather which disrupted shopping twelve months ago.
"The Autumn Statement's bleak assessment of the UK recovery is the latest in a sequence of poor economic news which includes falling sales, rising unemployment and stubbornly high inflation. The Chancellor offered some modest assistance but, this close to Christmas, more concrete progress on measures to inspire confidence in consumers and businesses is badly needed."
Helen Dickinson, Head of Retail, KPMG, said the latest figures confirmed that UK retailing is on the decline.
"The latest figures prove once more that the health of UK retailing is deteriorating. Christmas is a crucial trading period for the UK retail sector but this year many retailers will be nervous and unsure as to how the season will pan out. Cash-strapped consumers continue to be reticent and last week's gloomy economic forecast by the Chancellor won't help to boost confidence levels," she said.
"Any sales are hard won, with high discount and promotion levels. Retailers' performance is suffering because of weak top-line growth and declining margins, making the backdrop even more challenging. December will require some tough decisions for a number of retailers as they struggle to plot a path in such challenging conditions."
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