UK retail sales fall in November as lockdown bites
By Michele Maatouk
Date: Friday 18 Dec 2020
(Sharecast News) - Retail sales fell in November as lockdown restrictions took their toll, but they remain above pre-pandemic levels, according to figures released on Friday by the Office for National Statistics.
Sales dropped 3.8% on the month as non-essential shops were closed due to the Covid-19 crisis, compared to a 1.3% increase in October. Still, this was better than expectations for a 4.2% decline and overall sales remain above their pre-pandemic levels.
On the year, retail sales rose 2.4% versus a 5.8% jump the month before, in line with consensus expectations, with feedback from businesses suggesting that consumers had brought forward Christmas spending.
Clothing store sales fell 19% on the month and fuel sales slid 16.6%, while food store sales were 3.1% higher.
ONS Deputy National Statistician for Economic Statistics Jonathan Athow said: "After a run of strong growth, retail sales fell back in November as restrictions meant many stores had to close their doors again. Clothing and fuel were particularly hit by the winter lockdown, with their sales falling sharply. Despite the monthly fall, overall sales remain above their pre-pandemic levels.
"Household goods and food shops were the only areas to see their monthly sales increase, with feedback from stores suggesting consumers brought forward their Christmas spending, particularly on festive home products and DIY. Food sales, especially click and collect, were boosted as people were not able to eat out."
Thomas Pugh, UK economist at Capital Economics, said the relatively small drop in retail sales in November suggests the second Covid-19 lockdown didn't change households' spending behaviour by anywhere near as much as the first.
Pugh noted that while the 3.8% decline wiped out most of the growth so far this year, sales were still 2.7% above their pre-crisis level.
"And the drop was only a fraction of the 18.1% month-on-month fall in April," he said. "This is partly because sales of petrol held up much better, only falling by 16.6% m/m compared to -51.8% m/m in April, as schools, factories and construction sites stayed open."
He added that food sales also benefitted from the ban on dining out.
"The ongoing restrictions on the hospitality industry may mean that retail sales have a bit of a bumper Christmas as consumers spend the money they have saved on dinners and drinks on extra presents from retailers. But this won't make up for the reduction in spending elsewhere, so broader consumption will remain subdued over the next few months.
"Looking beyond that, though, the wide rollout of a vaccine early next year and the pile of savings households have accumulated will allow spending to recover at a faster rate than most expect."
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