Christmas shortage fears push up retail sales in Great Britain | Retail industry
A rush to beat Christmas shortages gave retailers a boost in November, according to official figures that showed sales jumped 1.4% on the previous month.
Fears that supply chain hold-ups would limit stocks of festive toys, jewellery, clothes and homeware sent shoppers rushing to buy on the high street and online before the usual retail spending spree in December.
Analysts said November could prove to be a high-water mark after the arrival of the Omicron variant, which is expected to dent sales in the weeks running up to Christmas Day and into the traditional Boxing Day and January sales period.
Black Friday proved to be a bigger hit than expected, pushing sales beyond the 0.8% growth seen in October, which analysts forecast would be repeated in November.
The Office for National Statistics said sales volumes across the sector were 7.2% higher than their pre-pandemic levels from February 2020.
Clothing sales surpassed pre-Covid levels for the first time after a 2.9% rise. An increase in the number of people driving after disruption to fuel supplies in the two previous months also helped the sale of petrol and diesel increase 3.7%, although volumes were still 1.9% below pre-pandemic levels.
Meanwhile, sales in food stores dipped by 0.2% over the month.
Philip Shaw, a senior economist at Investec, said December would be hit by the new Covid-19 variant as people worked from home and refrained from going out to restaurants, theatres and pubs.
He said figures from the banks on spending “point towards a degree of consumer caution over the past week or two”.
Some analysts said the Bank of England’s decision to raise interest rates on Thursday to 0.25% could further dent consumer confidence but Shaw argued that households could absorb higher borrowing costs after amassing large amounts of savings over the last 20 months.
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Oliver Vernon-Harcourt, the head of retail at Deloitte, said month-on-month falls in online shopping were likely to reverse as Christmas approached.
“Online sales in November continued to fall from a peak in February 2021, accounting for 26.9% of all retail sales,” he said.
“However, more consumers may be inclined to shop online as we get closer to Christmas to avoid busy or crowded areas, given concerns around rising Covid-19 infection rates.
“While we don’t yet know how in-store footfall will be impacted, a drop from usual levels for this time of year could cause headaches for bricks-and-mortar retailers.”
He said shoppers had already begun to abandon trips to local high streets over concerns that they might contract or spread Omicron, while retailers have reported increasing numbers of staff falling ill who must self-isolate.
Lisa Hooker, the consumer markets leader at PwC, said: “By the beginning of December, the effects of the Omicron variant had begun to impact across the UK, and footfall has already begun to drop in city centres as shoppers heed advice to work from home and reduce household mixing.”
Source: theguardian.com