UK retailers see Black Friday hangover as sales plunge

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(iStock)
(iStock)

London - UK retail sales fell the most in 18 months in December as stores experienced their customary post-Black Friday lull.

The volume of goods sold in shops and online fell 1.5% from November, when heavy discounting saw sales jump 1%, the Office for National Statistics said on Friday. It was the biggest drop since June 2016 and the most for a December in seven years. Sales excluding auto fuel declined 1.6%.

Sales of household goods plunged 5.3% and clothing sales fell 1%. Only department stores saw an improvement, with sales rising 0.6%. In the fourth quarter sales rose 0.4%, half the pace seen in the previous three months. It means retail sales made almost no contribution to GDP in the period.

Black Friday has disrupted the Christmas shopping season since the American bargain frenzy was introduced in the UK in 2010. Purchases previously made in December are being brought forward, and retailers complain the pressure to keep prices low is damaging margins at the most crucial time of the year.

At the same time stores are facing a challenging economic backdrop, with the squeeze on living standards from inflation and higher interest rates meaning consumer confidence remains fragile.

Cautious note

A number of retailers have sounded cautious about the year ahead, including Marks & Spencer, which reported a drop in sales over the Christmas period.

“The longer-term picture is one of slowing growth with increased prices squeezing people’s spending,” said ONS statistician Rhian Murphy.

Quarterly sales from a year earlier held at growth of just 1%, the worst readings since May 2013.

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