Deep Black Friday discounting boosted spending across the UK’s high streets and online, according to the latest retail data from the Office for National Statistics (ONS).
Today’s ONS data suggest that Black Friday helped create a 1.1% increase in November’s retail activity as compared to the previous month – almost three times the 0.4% growth forecast by economists. Sales of electrical household appliances made the biggest contribution to growth, ONS said.
Commenting on the ONS data, Lisa Hooker, consumer markets leader at PwC said:
“After a disappointing October, it’s good to see retail sales picking up again in November. It was a month of two halves, with a slow start followed by sales ramping up in the final weeks as retailers kicked off their Black Friday and Christmas promotional activity in earnest.
“Given the continued resilience of consumer sentiment, we’re optimistic that Christmas shopping sales in December will hold up. However, one immediate risk is the weather - snow and freezing conditions dissuaded many shoppers from hitting the high street over the past week, and also delayed the deliveries of some online orders.
“Looking further ahead, UK consumers remain cautious about big ticket spending, particularly as income growth slows and inflation remains above 3%.
“We predict that furniture and electronics will be one of the first casualties of consumers tightening their belts, although we won't see the impact of this on the high street until the first quarter of 2018, which is traditionally the time of year that people think about big household purchases.
“If there will be one big winner this Christmas period, it will be the grocery sector, with consumers telling us in a recent survey that food for Christmas dinner tops their festive spending priorities. The combination of price inflation and a return of volume growth should boost the performance of the whole grocery sector over the Christmas period.”
Andrew Sentance, senior economic adviser at PwC, warned that consumers still face challenges from inflation running ahead of wages:
"Consumers still face a significant headwind from the fact that wages are growing more slowly than prices and that squeeze on real incomes will continue to act as a dampening influence on consumer spending in the first half of next year.
“But consumer confidence seems to have recovered from the shocks which hit retail spending earlier this year - rising inflation and increased uncertainty surrounding the Brexit process.
"December is a critical month for retailers, so we need to be cautious about reading too much into the underlying trend until we have passed the critical Christmas/New Year period. But these November figures provide some encouragement that consumer spending will end the year on a more positive note."