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A third of non-food spending now made online

By Paul Skeldon December 4, 2018 - 6:47 am

November is always a blip when it comes to sales, thanks to Black Friday and Cyber Monday, but this year the picture painted by non-food sales figures from British Retail Consortium (BRC) show that the shift to online is almost unstoppable.

According to its figures Covering the four weeks 28 October – 24 November 2018 show that online penetration rate increased from 32.6% last year to 33.8% in November 2018, an all-time high. On a total basis, sales increased 0.5% in November, against an increase of 1.5% in November 2017. This is the lowest growth since April and below the 3-month and 12-month averages of 0.8% and 1.3% respectively.

In November, UK retail sales decreased by 0.5% on a like-for-like basis from November 2017, when they had increased 0.6% from the preceding year. Over the three months to November, In-store sales of non-food items declined 1.9% on a Total basis and 3.3% on a Like-for-like basis. This is above the 12-month Total average decline of 2.3%.

Over the three months to November, food sales increased 0.8% on a like-for-like basis and 1.8% on a total basis. This is below the 12-month total average growth of 3.3%, which is the lowest since October 2017.

“This month cemented Black Friday as an increasingly digital event, with a record one-in-every-three-pounds of non-food purchases made online during the month. Black Friday week itself was bigger than last year, but did little to lift the overall pace of spending, with sales growth in November falling to its lowest rate in seven months. Weak consumer demand and falling confidence mean that retailers are in for a nerve-wracking run up to Christmas. Conditions in the industry have been particularly tough since the vote to leave the EU in 2016 and the current uncertainty has only compounded the challenges. Only when the UK secures a transition period with the EU that ensures tariff-free, frictionless trade will retailers be able to breathe a sigh of relief.”
– Helen Dickinson OBE, Chief Executive, British Retail Consortium

Non-food retail sales over the same period in the UK decreased 1.0% on a like-for-like basis and remained flat on a Total basis. This is above the 12-month Total average decrease of 0.2%. November Non-Food sales experienced a decline.

Online sales of Non-Food products grew 2.9% in November, the lowest growth on record, against a growth of 6.5% in November 2017. This is below the 3-month and 12-month averages of 5.3% and 7.1% respectively.

“Aggressive promotional activity around Black Friday failed to lure shoppers, with like-for-like sales in November actually down 0.5 per cent on last year. The benefit of the full weekend, including Cyber Monday, won’t be realised until next month, but it’s clear that growth remains elusive formany retailers. Demand for the latest tech – whether that be driven by deals or new releases – did provide some relief from this bleak picture in which even grocery sales were fairly stagnant as food price inflation eased. As we’ve come to expect, online sales did fare better but when compared to the previous year’s growth, the performance wasn’t stellar. Sales growth and profitability don’t necessarily go hand-in-hand, especially against a backdrop of deep discounting, so in this environment a laser-like focus on margin and cost base is absolutely essential.”
– Sue Richardson, Retail Director, KPMG

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