BRITISH retail sales growth remained sluggish in November despite Black Friday deals, as the ongoing cost-of-living squeeze prompted shoppers to rein in spending on non-essential items, the British Retail Consortium (BRC) said on Tuesday (Dec 5).

The BRC said spending in its members’ stores increased 2.7 per cent in annual terms last month, well below the 4.2 per cent rise a year ago, and similar to the 2.5 per cent increase in October.

The BRC data is not adjusted for inflation, so November’s sales growth represents a fall in the volume of goods purchased.

“The cost-of-living crisis has taken its toll on Christmas spending for many households, and the continued economic conditions are testing consumer resilience,” said Paul Martin, UK head of retail at accountants KPMG, who sponsor the data.

Tuesday’s figures suggested consumers were opting for budget-friendly items. The food and drink and personal care categories drove sales growth as spending on expensive items such as jewellery fell.

Britain’s economy is still suffering from weak growth, but official data showed consumer price inflation slowed sharply in October to 4.6 per cent, after hitting a 41-year of over 11 per cent one year earlier.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The Bank of England (BOE) has held interest rates at 5.25 per cent at its last two meetings following 14 back-to-back increases since December 2021. While financial markets are almost certain rates have peaked, BOE officials, who are closely monitoring upside risks to inflation, have stressed it is too early to cut rates.

Martin said weak sales could lead to some retailers collapsing in early 2024, especially in the case of purely online retailers who had seen the most prolonged fall in sales.

Online spending data from Adobe Analytics last week showed a 5.6 per cent year-on-year increase during Black Friday and the immediate days after.

Separate figures from Barclays on Tuesday showed consumer spending on payment cards rose by 2.9 per cent year-on-year in November, compared to 2.6 per cent in October, helped by extended Black Friday sales and early Christmas shopping.

It said consumers turned more optimistic about economic pressures, with concerns about inflation and the cost of food prices reaching the lowest level since December 2021.

However, Jack Meaning, chief UK economist at Barclays, said it was unclear if this would boost sales volumes next year.

“The key question for the UK is what happens after the holiday period. It will take more than a festive bounce to keep consumers spending in 2024,” he said. REUTERS