Black Friday fails to prevent retail sales slide
Rise in online sales and continued price deflation lie beneath headline trend
Hype around Black Friday 2015 was as least as intense, if not more so, than it was last year. But sales for the month in which the day of discounting falls did not follow suit.
According to data produced by the British Retail Consortium and accountants KPMG, retail sales fell 0.4 per cent in November compared to last year.
The BBC reports that shoppers held off spending in the early part of the month in preparation for a blow-out on bargains, but then may have been disappointed by what they saw.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"November's relatively flat sales figures are a reality check for the retail sector with consumers holding off for a Black Friday bargain pitted against retailers determined to hold onto their hard-earned margins," said David McCorquodale, head of retail at KPMG.
Short-term factors influencing the figures include the unseasonable mild temperatures for the month, which hit sales of cold-weather clothing. But it is established, longer-term market shifts that continue to be the main driver of trends.
The market is still in the grip of a deflationary cycle, The Guardian reports, as shoppers "grow accustomed to discounts following the downturn" and supermarkets continue to fight a fierce price war.
BRC figures showed prices fell by a record amount in percentage terms last month, which reduced takings at the till and retailers' margins.
Elsewhere, the move to online shopping is a major source of disruption and another factor bringing downward pressure on prices.
Internet sales rose 12 per cent year-on-year and were higher in all categories in November. Online purchases as a proportion of the total have been higher every month of this year so far.
In fact, Helen Dickinson, chief executive of BRC, said online shopping was so distorting the market that the likely trend in December is hard to pin down. “This build-up to Christmas is one of the hardest to read in years,” she said.
Retail sales fall from Rugby World Cup highs
30 October
The high street has followed the trajectory of our home nation rugby teams, with sentiment falling back after a wave of euphoria in September.
Fanfare surrounding the Rugby World Cup had boosted retail sales in September, with official data showing the fastest rise since 2013 and the 29th consecutive month of growth.
Food and drink sales connected with viewing of the tournament boomed - and of course an influx of foreign visitors helped, too.
But latest figures from the Confederation of British Industry found a net balance of 19 per cent of 119 firms surveyed saw sales rise in October. This is well down on the 49 per cent in September and the 51 per set predicted for this month, The Guardian notes.
A separate poll by market research group GfK found consumer confidence fell from a net rating of +3 in September to +2 this month, apparently affected by concerns over the slowing global economy.
All is not as gloomy as this might appear, though. The CBI says sales were "regarded as above average for the time of year and growth was expected to improve next month".
The increase in orders placed retailers have placed with suppliers was also "lower than expected but remained above its long-run average".
One of the issues facing retailers is that a dynamic of higher sales being fuelled by falling prices and heavy discounting has become established. Rising wages and zero inflation has left most people better off, but "more shopping and bigger sales volumes do not necessarily help a retailer's bottom line", The Guardian explains.
This trend could continue into the critical Christmas period, which now begins with a 'Black Friday' sale - this year on 27 November - where shoppers are offered big money-off incentives to spend.
Rugby World Cup gives high street big boost
22 October
The Rugby World Cup may have been a chastening experience for the home nations, but the economic benefits will be "felt long after the knocks and bruised egos", says Jeremy Cook, chief economist at payments company World First.
Cook was speaking to the Daily Telegraph in the wake of new figures from the Office for National Statistics, which showed a big boost for retail sales during September as a result of spending associated with the rugby tournament, which is being hosted in England and Wales.
The data show sales rose 1.9 per cent in September compared to August, the 29th consecutive month of growth and the strongest increase since 2013. The scale of the increase relative to the same month in 2014 was impressive at 6.5 per cent, giving a welcome boost to third quarter economic growth numbers that will be published later.
City analysts had expected sales to rise on a monthly basis by around 0.4 per cent, with the bigger-than-expected bounce sending the pound higher against the dollar.
"Falling in-store prices and promotions around the Rugby World Cup" were the main factors driving the strong monthly growth, said Kate Davies, head of retail statistics at the ONS. In particular food sales rose by 2.3 per cent from the previous month.
The rise came even though average prices at shops, including petrol stations, were 3.6 per cent lower in September than they had been a year earlier, the BBC adds.
The period covered by the figures, 30 August to 3 October, includes the August bank holiday. This was not the case for the comparable data for September 2014, but the ONS said seasonal adjustments would remove the effect of the inclusion.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'People shouldn't have to share the road with impaired drivers'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
Is academic freedom in peril?
Today's Big Question Faculty punishments are on the rise
By Joel Mathis, The Week US Published
-
Quincy Jones, music icon, is dead at 91
Speed Read The legendary producer is perhaps best known as the architect behind Michael Jackson's 'Thriller'
By Peter Weber, The Week US Published
-
Shoppers urged not to buy into dodgy Black Friday deals
Speed Read Consumer watchdog says better prices can be had on most of the so-called bargain offers
By The Week Staff Published
-
Consumer confidence boost raises Black Friday sales hopes
feature Economic optimism increases ahead of annual shopping spree
By The Week Staff Published
-
Black Friday deals: are they really a bargain?
Speed Read Analysis by Which? shows that nearly nine in ten product prices were the same or cheaper earlier in year
By Mike Starling Published
-
One in 20 Black Friday deals are genuine
Speed Read Consumer group Which? says the shopping event is ‘all hype’
By The Week Staff Last updated
-
Black Friday 2019 smartphone deals: iPhone 11, Google Pixel 4 and more
In Depth There are already discounts to be had on the latest smartphones
By The Week Staff Last updated
-
Five tricks to get the best Black Friday deals
In Depth Beware of scams amid the bargains to be had in shops and online
By The Week Staff Last updated
-
Black Friday: why are retailers falling out of love with sales bonanza?
In Depth Profit margins can be hit as shoppers save up to splurge on day of discounts - and then return much of what they purchased
By The Week Staff Published
-
Amazon up 80% despite 'Prime Day fail'
In Depth Tweeters mocked Amazon's day of discounts, but online retailer reports strong sales
By The Week Staff Published