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8th February 2023

EY comments on today’s ONS retail sales figures for November

EY comments on today’s ONS retail sales figures for November

Silvia Rindone, EY UK&I Retail Lead, comments:

“Retail sales volumes fell by 0.4% in November, despite Black Friday and the start of the 2022 World Cup which should have provided a boost to pre-Christmas trading. Although retail sales values increased by 0.5% in November this was largely due to rising inflation.

“Falling consumer confidence has meant many retailers started heavy discounting well-ahead of Black Friday to entice shoppers to bring forward their Christmas spending. While this may have worked in the short-term, consumers are being cautious and making considered choices about what they spend their money on in the lead up to Christmas.

“EY’s latest Future Consumer Index found that nearly half of UK consumers (43%) are expecting to spend less over the festive season, with 29% planning savings on food, while nearly one-in-three (31%) expect to spend less on alcohol. Present giving will also be affected, with 43% of consumers planning on cutting back on gifts for friends, and 34% planning on cutting back on gifts for family.

“This year, consumers will be focusing less on indulgence and more on usefulness, so retailers and brands will need to ensure they have the right products in stock for smaller, more close-knit events and thoughtful gifting. 

“Looking ahead, it’s questionable if retail sales will hold firm in December given the soaring cost of living and the impact of rail and postal strikes. With nearly seven-in-ten consumers (67%) ‘extremely concerned’ about the rising cost of living, shoppers are now implementing a raft of measures to cope, including cutting-back on discretionary spending and opting for own-label alternatives. It will be critical for retailers and brands to understand the price sensitivity of their customers and react accordingly if they want to continue to win spend in 2023.”