Adjustment for Black Friday

The November figures are negatively distorted by the late timing of Black Friday, which is outside the period of the November RSM (27 Oct – 23 Nov 2019), whereas last year Black Friday sales were included.

As detailed below, we have calculated an adjusted growth figure by (A) using the four weeks prior to Black Friday 2018 as a comparator, and (B) making further adjustments to compensate for the fact that the shifted November 2018 comparative was one week further from Christmas (sales rise each week closer to Christmas).

Covering the four weeks 27 October – 23 November 2019

• On a Total basis, sales decreased by 4.4% in November, against an increase of 0.5% in November 2018. This is distorted by the later timing of Black Friday this year. This is below both the 3-month and 12-month averages of -1.7% and -0.2% respectively.
• Adjusting for Black Friday, UK retail sales increased 0.9% on a Total basis from November 2018. This is above both the 3-month and 12-month averages of 0.0% and 0.2% respectively (including adjusted November 2019 figures).
  
  
• UK retail sales decreased by 4.9% on a Like-for-like basis from November 2018, when they had decreased 0.5% from the preceding year. This is distorted by the later timing of Black Friday this year. This is below both the 3-month and 12-month averages of -2.2% and -0.7% respectively. 
• Adjusting for Black Friday, UK retail sales increased 0.4% on a Like-for-like basis from November 2018.
  
  
• Over the three months to November, In-store sales of Non-Food items declined 5.2% on a Total and 5.5% on a Like-for-like basis. This is distorted by the later timing of Black Friday this year. This is worse than the 12-month Total average decline of 3.4%.
  
  
• Over the three months to November, Food sales increased 0.3% on a Like-for-like basis and 1.3% on a Total basis. This is below the 12-month Total average growth of 1.5%.
  
  
• Over the three-months to November, Non-Food retail sales in the UK decreased by 4.3% on a like-for-like and 4.1% on a Total basis. This is below the 12-month Total average decrease of 1.7%. For the month of November, Non-Food was in decline year-on-year for the month but was heavily distorted by the timing of Black Friday.
  
  
• Online sales of Non-Food products declined by 10.1% in November, against a growth of 2.9% in November 2018 but this is heavily distorted by the timing of Black Friday. This was below the 3-month average decline of 1.3% and 12-month average growth of 2.7%.
  
  
• Non-Food Online penetration rate was 33.8% last month, though this would likely be much higher if Black Friday and Cyber Monday were included.

Paul Martin, UK Head of Retail | KPMG

“At first glance, November’s decline in like-for-like retail sales of -4.9% will leave retailers reaching for the smelling salts, but context is key. If adjusted for the later timing of Black Friday and Cyber Monday, sales are more likely to have increased by a more palatable 0.4% like-for-like.

“Over the course of November, consumers will have held off making purchases in anticipation of discounts to come, despite many retailers spreading out promotions across several days, if not weeks. That said, consumers will also have put Brexit and political uncertainty to one side temporarily, focussing on promotions and the upcoming festivities instead.

“The key question will be whether demand can rebound enough to make up for several disappointing months of trading this year. Grocers are likely to have weathered the storm better than most but Black Friday is key to many non-food categories.

“Retailers have their foot to the floor during this critical trading period, but it won’t be until Christmas trading reports land in January that we’ll truly know whether their strategies have proved fruitful.”
Helen Dickinson OBE, Chief Executive | British Retail Consortium.

“Once the figures are adjusted to take account of the timing of Black Friday, growth appears stronger in November than in previous months. Shoppers appeared ready to take advantage of the great bargains available, both online and on the high street. Electronics and clothes both benefited from big discounts, with the recent cold snap adding further urgency to purchases of winter-wear. Furthermore, as the spectre of a No Deal Brexit has been pushed back to after Christmas, consumers were more prepared to open their wallets to a little extra festive spending.

“Politicians may be in the full swing of campaigning today, but the next Government must be ready to hit the ground running on December 13th. If the next Government wishes to see retail spending remain healthy in 2020 it is essential they clarify our future relationship with the EU as soon as possible. If consumers are to avoid price rises, and reduced availability, politicians must put frictionless, tariff-free trade at the top of their new agenda.”

Food & Drink sector performance | Susan Barratt, CEO | IGD

“Food and grocery sales saw a continued slowdown in November and it is unclear if it will pick back up as the festive season approaches. It’s become a truism that the Christmas spending rush arrives later each year. Indeed, retailers will be well-prepared to meet shopper needs no matter how late they come, but whether this year will deliver the Christmas boost they may hope for remains to be seen.

“Shoppers’ financial confidence remains subdued, with a slight improvement recently as the focus moves away from Brexit to Christmas. Environmental considerations and saving money look to be front of mind this year, with 71% of shoppers intending to reduce the environmental impact of their grocery shopping this season and the spend on the Christmas day main meal expected to be down by £2 per person. Retailers therefore have an opportunity to provide shoppers with the best value products while maintaining the quality and sustainability they desire.”

-ENDS-

For Media Enquiries:

Simon Wilson
PR Assistant Manager, KPMG
T 0207 311 6651
M 07785 373397
E simon.wilson@kpmg.co.uk

Tom Holder
BRC Press Office
T 0207 854 8924
M 077732382432
E lara.conradie@brc.org.uk

Alexandra Crisp

Senior Communications Officer, IGD
T 01923 857141
M 07590 183295
E Alexandra.Crisp@igd.com

About the British Retail Consortium

The BRC’s purpose is to make a positive difference to the retail industry and the customers it serves, today and in the future.

Retail is an exciting, dynamic and diverse industry which is going through a period of profound change. The BRC is committed to ensuring the industry thrives through this period of transformation. We tell the story of retail, work with our members to drive positive change and use our expertise and influence to create an economic and policy environment that enables retail businesses to thrive and consumers to benefit. Our membership comprises over 5,000 businesses delivering £180bn of retail sales and employing over one and half million employees.

About KPMG in the UK

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.