UK retail sales slide unexpectedly in November

Black Friday and early Christmas shopping fail to lift sales as consumers show caution

People demonstrate in central London against the rising cost of living. EPA

Former British prime minister Boris Johnson said workers should accept a pay cut to avoid spiralling inflation. AFP

Inflation in the UK hit an annual rate of 9.1 per cent in May. EPA

The British government told workers they cannot expect pay rises to keep up with the increasing cost of living. EPA

The Bank of England, which says it can do nothing to stop the sharp increase in prices, is raising rates at an unprecedented rate. AFP

The UK was also brought to standstill by the biggest rail strike in 30 years this week, with 40,000 RMT union members walking out in a row over a below-inflation pay offer. PA

The RMT picket line outside Bristol Temple Meads station. PA

The cost of petrol continues to rise. AFP

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Volunteers in Bradford, northern England, prepare food parcels at the Bradford Central Foodbank. More and more people are visiting the centre. AFP

UK retails sales in November fell unexpectedly in monthly terms, indicating rising caution among shoppers, the Office for National Statistics (ONS) has said.

Retail sales volumes dropped 0.4 per cent last month after rising 0.9 per cent in October — a bounce back from September when sales were affected by an extra public holiday to mark the funeral of Queen Elizabeth II.

A Reuters poll of economists had predicted a 0.3 per cent rise from October.

Compared with a year earlier, last month's retail sales were 5.9 per cent lower, the ONS said, a larger drop than economists had forecast.

“Black Friday and holiday sales have failed to produce the expected sales uplift," said Kevin Bright, partner and global leader of the consumer pricing practice at McKinsey and Company. "While consumers are spending 4.2 per cent more than a year ago, they are focusing on essentials like food and footwear, with overall sales volumes down 5.9 per cent."

“While price increases are influencing spending across the board, our latest consumer research indicates that younger generations are the most likely to be scaling back — 64 per cent of millennials and 65 per cent of Gen X are planning to buy fewer products/services in the future if prices continue to rise."

Erin Brookes, head of retail in Europe at management consultancy Alvarez and Marsal, said: "It is clear that retailers are struggling to shift stock, with Christmas sales beginning earlier than in recent years and discounts being offered for a longer period.

"A combination of the cost-of-living crisis, strike disruption and severe weather will likely curtail spending further in December, affecting both in-store and online purchases."

Food sales showed some strength. Volume rose 0.9 per cent in the month, suggesting that people were doing their Christmas food shopping early.

Nevertheless, supermarkets in recent months have noted a decline in volumes sold because of the increased cost of living and higher food prices, the ONS said.

Also on Friday, market research firm GfK said British consumer confidence had crept up this month but was still close to all-time low levels.

The retail sales figures come at the end of a week of economic data releases in the UK. Inflation was shown to have dropped slightly on Wednesday but remained near 40-year highs.

Meanwhile, the Bank of England raised interest rates by half a percentage point to 3.5 per cent on Thursday.