Retail sales declined by 0.1% month-on-month in November, according to the latest figures from the Office of National Statistics (ONS). Economists polled by Reuters had predicted growth of 0.4%, with sales boosted by the Black Friday shopping event.
These disappointing figures match the latest Barclay Consumer Spend report, which found that November retail spend fell 1.1% year-on-year in the UK, marking the sharpest decline in consumer card spending since February 2021. There was growth in fashion, beauty and homes, and the online sector outperformed physical retail with a record £3.8 billion spent online during the four days of Cyber Weekend, according to Adobe Analytics. However, this was not enough to offset weakened consumer confidence.
“After a dip last month, retailers will be disappointed to see sales fall again in November, especially given the significance of Black Friday in the industry calendar,” said Deann Evans, managing director, EMEA, Shopify. “The blow is heightened further following what were encouraging signs and positive sentiment in the lead up to Black Friday weekend. According to Shopify’s 2025 Holiday Shopping Report, British shoppers planned to spend more than 15% more this BFCM compared to last year. 80% of UK businesses, meanwhile, expected higher sales.”
Impact of Autumn Budget
Nicholas Found, head of commercial content at Retail Economics, said the late Autumn Budget impacted the figures. “While Black Friday was the month’s defining event, its impact was dampened by heightened uncertainty ahead of the Budget, with shoppers tactical and value-focused,” he said. “Our research with MRI Software shows three-quarters of consumers intended to shop Black Friday, using the event to pull forward Christmas spending rather than spend more overall.”
He pointed to weak consumer confidence as an ongoing problem for retailers. “Inflation eased in November as promotions delivered value for consumers, but easing price rises alone don’t change the wider picture. The cost of living remains the dominant concern for households, and retailers are now operating in an environment where wins increasingly come at a competitor’s expense.”
Erin Brookes, European Retail and Consumer Lead at Alvarez & Marsal, echoed this sentiment. “The softness reflects a wider unease,” she said. “Household budgets are still tight and the Budget failed to provide clarity, keeping spending decisions on hold. At the same time, the policy environment is adding further strain on parts of the sector. The Chancellor’s last-minute U-turn on business rates heaps additional pressure on UK supermarkets. Across the board, margins in are being squeezed ever more tightly, constraining investment and reducing headroom to keep prices down for customers.”
The real test is still to come
“As the golden quarter enters its final stretch, retailers will be pulling every lever to convert last-minute demand, as well as getting into clearance for categories that have not shifted sufficiently,” Brookes added. “Competition will be intense for each pound of discretionary spend as they race to the finish line of the festive trading period.”
Found agreed that the “real test” for retailers is in the run-up to Christmas. “Returns volumes over the coming month will determine whether recent deals have lived up to expectations – and, crucially, whether they convert into profitable growth,” he said.
Deann Evans struck a positive note. “Retailers can be optimistic that sales will bounce back with peak shopping season continuing in the lead up to Christmas,” she said. “The festive period was already front of mind in November, with Christmas tree stands (+275%), Christmas tree skirts (+250%) and artificial trees (+224%) all seeing significant growth in sales according to Shopify product data. Moreover, consumers are being motivated by seasonal trends and embracing the colder weather. Sales of candle making kits (+128%), casserole dishes (+126%) and craft kits (+60%) all rose sharply as people leaned into home comforts.”
What retail needs to do
Nonetheless, retailers need to take a deliberate and tailored approach to winning custom during the remainder of the golden quarter, said Leigh Thomas, vice president EMEA, Intuit. “As we approach the final stages of Christmas shopping, retailers should adopt a deliberate and audience-first approach to their communications. Rather than relying on repetitive, one-size-fits-all campaigns, retailers can create greater impact through tailored messaging. Personalised recommendations, timely transactional messages, and an integrated approach across channels and customer touchpoints can all be particularly effective here.
“Importantly, the appetite is there; 62% of consumers are open to sharing their data in exchange for more personalised experiences. Retailers should focus efforts on deepening customer relationships in order to set themselves up for sales growth in December and beyond,” she added.
However, with consumer confidence still low, it remains to be seen whether Christmas will succeed where Black Friday failed in giving retail the sales boost it needs.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
