UK retail sales values fell 2.6 per cent on a like-for-like basis in November, from November 2007, the first time since measurement began that sales have declined for two consecutive months.
Food and drink was the only sector to show sales up on a year ago, although this was due ostensibly to price inflation rather than additional volume. With reference to food and drink, Joanne Denney-Finch, chief executive, IGD, said: "November was a better month for food and grocery, with sales more buoyant than October. Every national newspaper has carried competitive supermarket promotions over the last few weeks as retailers jostle to attract festive shoppers into stores.
"Heavy discounting, early VAT cuts and even 'buy-one-get-two-free' promotions are combining to encourage people to move from one store to the next, scrutinising value. Our consumer research at IGD certainly supports the notion that people are shopping around more than ever to find the best deals as they tighten their belts," she said.
Joscelyne Hynard, senior analyst, BRC, added: “Food sales remained the main driver of overall sales, despite some slowdown from October's growth which was the weakest since March. Sales are still inflated by high food prices, though food inflation has slowed. Tight budgets meant shoppers looked for promotions and value ranges.”
Discounts and promotions continued but often failed to tempt customers to buy non-food items unless they perceived value or really needed the product.
Stephen Robertson, director general, British Retail Consortium, said: "The numbers speak for themselves - these are clearly tough times. In the 14 years of this survey we have never recorded two consecutive months of total sales falls. Like-for-like sales have now fallen in eight out of the last nine months. All sectors are down apart from food and drink.
"Retailers will be hoping that customers have been putting off Christmas shopping - not cancelling it,” he said.
"With money tight at the moment shoppers can take advantage of the extraordinary levels of deals, offers and promotions. The recent VAT and interest rate cuts may also provide some stimulation."
Helen Dickinson, Head of Retail, KPMG, said: "The trend in retail sales continues in a downward direction, with food and drink being the only sector to see positive like-for-like sales growth. There is little doubt that Christmas will arrive late for many retailers, leaving them with a very nerve-wracking couple of weeks to come.
“It's possible that November's figures have been negatively impacted by consumers delaying purchases in the last week of the month following the VAT announcement, while they waited for the change to be implemented. However, even before this, there was a significant increase in promotional activity aimed at enticing consumers to spend. We are seeing a huge variation in how effective this is proving to be for individual retailers, which just highlights how volatile and challenging the market currently is," she said.
