Retail sales in the UK fell last month despite the sector entering the crucial Christmas period, the latest official figures show.
According to the Office for National Statistics (ONS), the volume of retail sales in November dropped by 0.4% when compared with October. Retail sales value fell by 0.1% over the same period.
The decline came even though retailers appear to be undertaking heavy discounting to attract customers. Retail prices increased by 3.6% year-on-year in November, falling from the 4.4% rise reported in October.
Howard Archer, chief UK and European economist at IHS Global Insight, says it is difficult to be optimistic about the UK’s consumer spending, even if the sector does manage to boost sales over the Christmas period.
“Consumer confidence remained mired near record low levels in November, with purchasing power under severe pressure from high inflation, muted wage growth and tight fiscal policy,” he says.
“Meanwhile, unemployment is now rising markedly overall and the jobs outlook is looking pretty bleak at the moment.”
Recently, the Confederation of British Industry (CBI) found that a net 19% of retailers say high street sales fell in November compared with a year earlier. A balance of 6% also expect sales to fall further in December.
Ian McCafferty, the chief economic adviser at the CBI, said: “Retailers may be hoping that shoppers will loosen their purse strings in the run up to Christmas, but consumers are likely to remain cautious about spending given the uncertain economic outlook.”
To receive more relevant articles like this one, why not sign up to our briefings and breaking alerts by clicking here.