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Online wins highest share of November sales, as Black Friday shoppers move away from stores

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Online won its highest share yet of retail sales in the Black Friday month of November, driving growth for the month, while store sales fell sharply at the same time, new British Retail Consortium (BRC) figures suggest today.

Some 27.3% of non-food sales took place online, according to the BRC-KPMG Retail Sales Monitor for November. That was the highest proportion yet recorded by the BRC, rising from 26.3% in October. Indeed, November online growth of 6.5% drove non-food retail sales growth for the month, which was up by 1.5% in total, and up by 0.6% on a like-for-like (LFL) basis that strips out the effect of store openings and closures. Store sales of non-food items were down by 3% in total, and 3.7% LFL.

The long-term trend is towards falling in-store sales – over the last 12 months, today’s BRC figures showed, they have declined by 2.2% – the deepest in the five years covered by the BRC’s records, which began in January 2012.

Despite winning a greater share of sales, the online growth seen in November was still behind both the 12-month average of 8% and the three month average of 7.5%, while retail sales of non-food products grew by 1.5% in total in November, in line with the 12-month average of 1.4%.

Food sales, however, grew strongly, rising by 4% in total and by 2.8% on a like-for-like basis in the three months to November. That’s ahead of the longer-term trend, with total average growth up by 3.4% in the last year.

Helen Dickinson, chief executive of the BRC , said: “November brought relief as growth in retail sales perked up after last month’s dip. Black Friday, the big retail event of the month, failed to fundamentally shift underlying trends in spending. Food sales were responsible for pretty much all the growth this month as higher prices continue to absorb more of the weekly shopping budget. Non-food sales – the focus of Black Friday – fell, as the squeeze on household incomes continues to impact discretionary spend.

“That’s not to deny that Black Friday was a significant event. Sales of non-food products that week were over 40 per cent higher than in the other weeks of the month, while it was the biggest week ever for non-food products online. However, rather than increasing overall sales, the event has shifted spending away from other parts of the festive period, and focusses shoppers’ attentions online and away from stores.

“There was a mixture of performances across the industry over Black Friday itself, with retailers reporting shoppers being tempted solely by generous promotions, but resisting other items. Gaming, wearable tech and ‘internet of things’ performed well, while toys, last year’s star performer, saw sales sharply down this year.

“This year’s Black Friday has demonstrated that in such a tough economic environment, consumers have become ever more careful, willing to wait and deploy their discretionary income only when they see an exceptional bargain. That heralds a challenging festive period ahead for retailers and shoppers alike.

“With current conditions likely to persist into next year, the Government needs to do all it can to support the UK’s consumers, not least by securing a fair Brexit for them in the forthcoming trade negotiations.”

Paul Martin, head of retail at KPMG , said: “Retailers will be wondering whether the juice is worth the squeeze, with Black Friday sales resulting in a meagre 0.6% uptick in like-for-like growth, when compared to November last year. In what has been a difficult year for the industry, any growth is most welcome, but profitability is what remains paramount.

“Despite Cyber Monday falling outside November’s figures, sales growth was clearly more prominent online, with non-food online sales up 6.4% on last year and penetration rates as high as 27.4%. After previous in-store stampedes, it is clear that retailers are increasingly moving Black Friday away from the high street.”

Commenting, Rupal Karia, commercial sector MD at Fujitsu, said:

“These latest figures point to one simple truth: consumers continue to be conscious of where and how they spend their money. The fact that growth was entirely driven by food purchases while spending elsewhere fell suggests that people are less willing to treat themselves. The search for value will continue, and retailers must think of how they can attract customers who are increasingly aware of how to make the most of their budget.

“Fujitsu’s own recent Forgotten Shop Floor study found that 8-in-10 consumers reported they would spend more with retailers that have a better technology offering. This means that, whilst high street stores still hold huge opportunities, those unwilling to embrace technological advancements will fail to thrive.

“In times of ever-increasing customer expectation and desire for instant gratification, it is imperative that retailers ensure they are moving forward and adapting their offerings to match the ever-changing consumer behaviour.”

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