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Growth in UK retail sales was lower than inflation last month, according to sector data published on Tuesday that suggests households continued to cut purchases in the run-up to Christmas.
The value of retail sales rose by an annual rate of 2.7 per cent in November, well below the 12-month average of 4.1 per cent, according to the British Retail Consortium.
The figure from the trade body was up slightly from 2.5 per cent in the previous month but also below October’s headline consumer price inflation reading of 4.6 per cent. It indicates shoppers are buying fewer goods despite spending more — a pattern seen since the second half of 2021.
The BRC data, compiled with advisory firm KPMG, gives an early picture of consumer spending ahead of official retail sales data on December 22.
It suggests that weakness in the sector, hit by the cost of living crisis, has continued into the festive season, the busiest spending period of the year.
BRC chief executive Helen Dickinson said discount event Black Friday boosted sales in early November but that “the momentum failed to hold throughout the month, as many households held back on Christmas spending”.
With less than a month to go and sales growth “limping along”, “the cost of living crisis has taken its toll on Christmas spending for many households”, she added.
The BRC reported stronger grow in health and beauty products, but a year-on-year decline in non-food sales.
The figures chime with statistics also published on Tuesday by Barclays, which showed that consumer card spending grew by 2.9 per cent year on year last month. That was up from 2.6 per cent in October, but still well below the rate of inflation.
The payments company, which monitors almost half of UK credit and debit card transactions, said spending on non-essential items grew by an annual rate of 2.7 per cent in November, compared with 2 per cent in the previous month.
The rise came as the retail sector received a boost from the early start to Black Friday sales and the late arrival of cold weather.
However, spending on restaurants fell further last month, registering an annual contraction of 11.9 per cent compared with a 10.3 per cent fall in October.
Spending on entertainment, furniture, electronics and home improvements also contracted year on year.
Jack Meaning, economist at Barclays, said that although the data suggested consumers were continuing to spend more while getting less for their money, “the gap is narrowing as the rate of price increases slows, and we expect it to narrow further in the coming months”.
