Pre-Christmas trading fears quashed by healthy November figures

The Amazon warehouse in Dunfermline ahead of Black Friday. Picture: Jon Savage

Fears over poor pre-Christmas trading have been quashed after official figures showed retail sales rose in November, outstripping expectations.

Sales volumes increased by 1.4 per cent compared to the previous month and 3.6 per cent on an annual basis.

Last month, Sports Direct boss Mike Ashley said the month had been the “worst on record” and warned businesses could be “smashed to pieces” by poor trading.

Economists had expected growth of just 0.3 per cent following two months of decline.

The strongest growth was in household goods stores, up 5.3 per cent, driven by an 11 per cent increase in electrical appliances.

Howard Archer, chief economic adviser at EY Item Club, said doubts persist over the underlying strength of retail sales. Although sales volumes were higher, growth was slower than the rate seen this time last year when spending was up 5 per cent and quantities rose 3.6 per cent compared to the previous twelve months.

“Indeed, there are bound to be suspicions about the November data given that the Office for National Statistics (ONS) has acknowledged that it is not easy to seasonally-adjust for Black Friday data given the changing nature of promotions,” he said.

“Furthermore, the underlying performance of retail sales still looks lacklustre with volumes up a modest 0.4 per cent in the three months to November compared to the three months to August.”

Online sales accounted for a fifth of total sales for the first time, just days after online-only retailer Asos issued a profit warning amid a disappointing pre-Christmas period.

David Jinks, ParcelHero’s head of consumer research, said: “ASOS’ gloomy November figures had us all braced for a poor month, especially as it was widely acknowledged Black Friday’s sales had under-performed. However, online sales this November were actually up 13.1 per cent on last November and soared by 36.3 per cent compared to the previous month.”

Rachel Lund, head of insights and analytics at the British Retail Consortium said: “ONS figures suggest, that while large retailers both online and offline had a dismal November, Christmas apparently came early for small businesses. With sales by small retailers growing more than 13 per cent on last year overall and 25 per cent online; there will be cause for more than a few raised eyebrows in the industry.”