November retail figures - Consumers still spending, for now

16th December 2022

The Office for National Statistics has reported retail sales figures in Great Britain for November:

Retail sales volumes are estimated to have fallen by 0.4% in November 2022 following a rise of 0.9% in October.

Non-store retailing (predominantly online retailers) sales volumes fell by 2.8% in November 2022, continuing a downward trend seen since early 2021, as the wider economy reopened and people could return to shopping in store.

Clothing stores sales volumes rose by 2.1% in November 2022, mainly because of growth in footwear stores.

Compared with the same period a year earlier, retail sales volumes fell by 6.2% in the three months to November 2022, while sales values rose by 4.4%.

Charlie Huggins, Head of Equities at Wealth Club commented, ""Given all the doom and gloom surrounding the UK economy, today's retail sales figures are far from catastrophic. UK consumers may not be feeling flush with cash, but they are still spending at a similar rate to last year. Stores are faring better than online, probably aided by the Royal Mail strikes, and clothing sales in store rose, which doesn't exactly suggest Armageddon.

All eyes now turn to the crucial Christmas period. This is the first Christmas since the pandemic without any lockdown restrictions, which may encourage one final spending splurge. The Royal Mail strikes should also continue to provide some festive cheer for traditional retailers, by encouraging more last minute shoppers into stores.

However, the real test for retailers will be what happens next year.

Pressure on UK consumers is mounting and is only likely to build in the coming months. With many people on fixed rate mortgages, the impact of interest rate rises has yet to be really felt.

One thing is for certain - as more people start to tighten their belts, investors in UK retail need to be even more picky than usual. We've already seen the likes of Made.com and Joules go to the wall. They won’t be the last. Any retailer that lacks a distinctive proposition and struggles to generate cash faces an uphill battle heading into 2023."