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Dec 20, 2018
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Bumper Black Friday boosts UK retail sales in November, broader picture weak

By
Reuters API
Published
Dec 20, 2018

British retail sales surged by much more than expected in November, boosted by Black Friday promotions, although the longer-term picture remains weak ahead of Brexit in little more than three months' time.



Importantly too, the figures  reported by the Office for National Statistics (ONS) on Thursday showed online sales as a proportion of all retailing exceeded 20 percent for the first time, with all online retailing accounting for 21.5 percent. 

Textile, clothing and footwear stores saw growth online of almost 21 percent year-on-year and e-sales now make up nearly 22 percent of the category's total turnover.

BEATING FORECASTS

Overall retail sales volumes in November, including the Black Friday sales period, jumped by 1.4 percent from October, surpassing all forecasts in a Reuters poll of economists that had pointed to a 0.3 percent gain.

But looking at the three months to November as a whole, which smooths out some monthly volatility, sales were up just 0.4 percent compared with the previous period -- the smallest increase since April.

The November sales surge contrasted with statements from some major retailers that showed a disappointing Black Friday.

An ONS statistician said the changing nature of Black Friday sales promotions posed a challenge for the process of adjusting for seasonal variations.

Online fashion store ASOS issued a profit warning on Monday as its November trading fell short of expectations, while the owner of the Primark clothing retailer said the market was "challenging" last month.

The ONS said household goods sales leapt by 5.3 percent on the month in November, the biggest increase since the end of 2013.

Thursday's ONS numbers will not influence the Bank of England's policy announcement due at 1200 GMT because the central bank's interest rate-setters have already concluded their December meeting.

They did not see the ONS retail sales report in advance.

Economists expect no change in rates from the BoE but are looking for signs of a discussion about the extent of a slowdown in Britain's economy.

Growth has slowed since the Brexit referendum in June 2016 but household spending was strong over the summer of 2018.

Britain's departure from the European Union on March 29, with no clarity yet on whether it can leave with a transition deal, has weighed on consumer confidence.

November data from the British Retail Consortium and Barclaycard has shown that households were continuing to shop cautiously.

But there has been some comfort for consumers in recent data which has shown the fastest growth in underlying pay growth since 2008 and inflation falling to a 20-month low of 2.3 percent.
 

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