21 July 2024, 11:24
By Furniture News Dec 05, 2023

Consumers delaying Christmas spend, says BRC-KPMG

Cautious consumers are delaying their Christmas spending, according to the latest Retail Sales Monitor from BRC-KPMG, which analyses shopper spend each month.

UK total retail sales increased +2.7% in November (against a growth of 4.2% in November 2022). 

Non-food was sales saw YoY decline. Online non-food sales decreased by -2.1%, against a decline of -0.4% in November 2022. The proportion of non-food items bought online (penetration rate) decreased to 41.4% in November from 41.6% in November 2022. Furniture ranked sixth of 10 product categories for online growth (up from 9th in October, but down from 1st YoY).

Helen Dickinson OBE, chief executive of the British Retail Consortium (BRC), says: “Black Friday began earlier this year as many retailers tried to give sales a much-needed boost in November. While this had the desired effect initially, the momentum failed to hold throughout the month, as many households held back on Christmas spending. Health and beauty products showed stronger growth, but non-food sales were down overall year on year. November had the highest proportion of non-food goods purchased online for 2023, though this remains below the previous years’ level.

Paul Martin, UK head of retail, KPMG, adds: “With the clock ticking down to Christmas, sales growth in November remained weak at +2.7%, despite a big push from retailers around Black Friday deals.

“With less than a month to go and sales growth limping along, the cost of living crisis has taken its toll on Christmas spending for many households, and the continued economic conditions are testing consumer resilience. Price remains the main purchasing driver, so we are likely to see a prolonged and well targeted period of discounting as retailers compete hard for a shrinking pool of spend and will need to clear stock.

“With two of the three months of the crucial golden quarter seeing sales growth below +3%, it has already been a weak Christmas trading period. Any excess stock not sold before Christmas could be further reduced leading to big January sales, and potentially having an even greater impact on already-tight margins. As we look to the first few months of 2024, we can expect the challenges to continue which could lead to further casualties in the sector, particularly pure online players facing more than 28 months of consecutive sales decline.”

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