Britain enjoys retail BOOST ahead of Christmas – but warning of ‘rough ride’ to come
Martin Lewis' tips for saving money on Christmas shopping
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According to figures from the Office for National Statistics (ONS) today retail sales volumes rose 1.4 percent in November, buoyed up by Christmas shopping and Black Friday. Sales volumes were also 7.2 percent higher than pre-pandemic February 2020 levels. Clothing in particular has pushed ahead, rising 3.2 percent above pre-pandemic sales. While sales overall grew the proportion sold online actually fell, dropping slightly to 26.9 percent.
However online still remains ahead of pre-pandemic levels where it accounted for a 19.7 percent share.
Helen Dickinson, Chief Executive of the British Retail Consortium, said: “It is clear that plenty of customers used the Black Friday sales as an opportunity to snap up bargains ahead of Christmas.
“This sales event, once limited to the last week in November, has now become a month-long discounting event.
“While traditional sales in TVs and other electronics could be found, there has been a clear expansion in clothing and footwear Black Friday discounts, boosting sales growth in these areas.”
While the run up to Christmas has brought strong sales for retailers there are concerns over what lies ahead though.
Over recent months footfall had been steadily growing as shoppers returned to the high street however evidence is now suggesting rising Covid cases have started to dent confidence.
Retail data experts Springboard have predicted footfall will start to drop considerably with traditionally busy areas such as London’s West End already seeing a 20 percent decline.
AJ Bell financial analyst Danni Hewson commented: “Omicron was an unexpected gift and one most retailers wish they could return.
“Despite a surge in spend on the high street in November which did take cash away from those online behemoths, December’s already shaping up to be a very different story.
“Footfall is down dramatically and there will be some consumers deciding what they don’t have now they won’t be buying, or they’ll resort back to their virtual baskets.”
Omicron is not the only headwind facing retailers though.
Yesterday the Bank of England predicted inflation would soar to as high as six percent year while announcing a hike in interest rates to 0.25 percent.
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With interest rate changes typically taking a long time to take effect it is likely households will experience a squeezed period of both high inflation and rising costs to debt and mortgages.
Emma-Lou Montgomery, associate director at Fidelity International warned it was going to be “a rough ride” for retailers in the coming months.
She explained: “Inflation is up at a 10-year high and cutting into household budgets, footfall is on the decline as Plan B takes effect and the rates of Omicron climb, and having enough workers to keep the tills ringing is a mounting challenge.
“And it’s not just the high street retailers feeling the effects.
“Online sales were down again in November and retailers, including even those with an online-only presence like Boohoo, are already scaling back sales guidance for the new year.”
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