Retail sales, Great Britain: November 2015

• Year-on-year estimates of the quantity bought in the retail industry show growth for the 31st consecutive month in November 2015, increasing by 5.0% compared with November 2014.
• The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, showed growth for the 23rd consecutive month, increasing by 2.1%.
• Compared with October 2015, the quantity bought in the retail industry is estimated to have increased by 1.7%.
• Average store prices (including petrol stations) fell by 3.3% in November 2015 compared with November 2014, the 17th consecutive month of year-on-year price falls.
• The amount spent in the retail industry increased by 1.4% in November 2015 compared with November 2014 and increased by 1.4% compared with October 2015.
• The value of online sales increased by 12.7% in November 2015 compared with November 2014 and by 4.9% compared with October 2015.
• Revisions to this release were caused by the incorporation of late data. The earliest revisions point for current price, non-seasonally adjusted data was November 2014. More information on revisions can be found in the background notes.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 1 November 2015 to 28 November 2015. Unless otherwise stated, the estimates in this release are seasonally adjusted. Estimates for November 2015 included “Black Friday”, however, “Cyber Monday” is not covered in this reporting period and will be included in the estimates for December 2015 published on Friday 22 January 2016.

The estimates in this release are based on a monthly survey of 5,000 retailers, including all large retailers employing 100 people or more and those with annual turnover of greater than £60 million who employ 10 to 99 people. It is estimated that this survey covers approximately 95% of all known retail turnover in Great Britain.

The quality of the estimate of retail sales

Retail sales estimates are produced from the monthly business survey – Retail Sales Inquiry (RSI). The timeliness of these retail sales estimates, which are published just 3 weeks after the end of each month, makes them an important early economic indicator. The industry as a whole is used as an indicator of how the wider economy is performing and the strength of consumer spending. Results are revised for the previous 13 published periods. More information about the data content for this release can be found in the background notes.

Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. The response rate in November 2015 was 64.6% of questionnaires, accounting for 92.4% of registered turnover in the retail industry. Therefore, the estimate is subject to revisions as more data become available.

All estimates, by definition, are subject to statistical uncertainty and for the retail sales index we publish the standard error associated with the non-seasonally adjusted estimates of year-on-year and month-on-month growth in the quantity bought as a measure of accuracy. More information on these standard errors can be found in the background notes and in the quality tables of this release.

We are continually working on methodological changes to improve the accuracy of the retail sales estimates; progress on these can be found on the continuous improvement page.

The reference tables offer different ways to access the data, they include:

• non-seasonally adjusted and seasonally adjusted volume and value indexes by industry

• year-on-year and month-on-month growth rates by industry

At a glance

In November 2015:

the quantity bought in the retail industry (volume):

• increased by 5.0% compared with November 2014

• increased by 1.7% compared with October 2015

the amount spent (value):

• increased by 1.4% compared with November 2014

• increased by 1.4% compared with October 2015

Non-seasonally adjusted data show that the prices of goods sold in the retail industry (as measured by the implied price deflator) decreased by 3.3%.

More information on how the implied price deflator and other estimates in this release are calculated, can be found in section 3 of the background notes.

Amount spent in the retail industry

In the 4 week reporting period during November 2015, the amount spent in the retail industry was £32.2 billion (non-seasonally adjusted).

This compares with:

• £28.8 billion in the 4 week reporting period for October 2015

• £31.7 billion in the 4 week reporting period for November 2014

This equates to an average weekly spend of:

• £8.1 billion in November 2015, compared with

• £7.2 billion in October 2015

• £7.9.billion in November 2014

Main points:

In November 2015:

• all store types showed increases in the quantity bought compared with November 2014

• all store types except food stores, other stores, and petrol stations showed increases in the amount spent year-on-year

• all store types saw falls in average store price compared with November 2014

  Table 2: Sector summary, November 2015

  Great Britain
  		Percentage change over 12 months			Average weekly sales (£ billion)
  		Quantity bought (volume)	Amount spent (value)	Average store price
  Predominantly food stores¹		1.6	-0.6	-2.2	3.0
  Predominantly non-food stores²		4.4	2.1	-2.3	3.6
  Non-specialised stores³		6.9	5.0	-1.8	0.8
  Textile, clothing and footwear stores		3.5	2.5	-0.6	1.0
  Household goods stores		6.9	4.4	-2.5	0.7
  Other stores		1.9	-1.8	-4.1	1.1
  Non-store retailing		13.2	10.6	-1.9	0.7
  Fuel stores		14.3	-0.2	-12.4	0.7
  Total		5.0	1.4	-3.3	8.1
  Source: Office for National Statistics Notes: 1. Supermarkets, specialist food stores and sales of alcoholic drinks and tobacco. 2.Non-specialised stores, textiles, clothing and footwear, household goods and other stores. 3.Department stores.

  Download this table Table 2: Sector summary, November 2015

  .xls (26.1 kB)

Figure 1 shows a comparison of the 4 main retail sectors and looks at how the quantity bought has changed within these store types. Non-store retailing, the smallest of the retail types, with a weight of approximately 7.0% has shown strong growth since 2010, this somewhat masks the growth seen in non-food stores and petrol stations in recent periods. In contrast, the quantity bought in predominantly food stores, which has a weight of 40.9% has remained fairly static throughout the time series.

Figure 2 looks at the amount spent in the 4 main retail sectors and it is evident that there are similar patterns to those seen in the quantity bought in all store types, with the exception of petrol stations. Petrol stations have shown the opposite effect with a decrease in the amount spent as the quantity bought increases. This is due to a price effect which can be seen in Figure 3.

Figure 3 shows the average store price within each main store type. We can see that average store price in predominantly food stores increased until mid-2014 then fell in more recent periods. This is very similar to the pattern in the quantity bought and amount spent. Prices in predominantly non-food stores and non-store retailing show a similar, more seasonal pattern, however, it appeared that non-store retailing was unaffected by changing prices as both the quantity bought and amount spent continued to grow. The story in petrol stations is different, suggesting that consumers were taking advantage of falling prices at the pumps with an increase in the quantity bought as the amount spent fell.

Seasonally adjusted internet sales data are published in the RSI Internet tables and include:

• a seasonally adjusted value index

• year-on-year and month-on-month growth rates

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. The reference year is 2012=100.

Main points:

• average weekly spending online in November 2015 was £888.4 million; this was an increase of 12.7% compared with November 2014
• the amount spent online accounted for 13.4% of all retail spending, excluding automotive fuel, compared with 12.0% in November 2014

  Table 3: Summary of internet statistics for November 2015

  Great Britain
  Category	Year-on-year growth	Proportion of total sales made online
  All retailing	12.7	13.4
  All food	11.3	4.4
  All non-food	16.2	10.6
  Department stores	24.4	12.7
  Textile, clothing and footwear stores	18.2	13.5
  Household goods stores	38.3	9.1
  Other stores	-7.2	7.2
  Non-store retailing	10.6	72.8
  Source: Office for National Statistics

  Download this table Table 3: Summary of internet statistics for November 2015

  .xls (26.6 kB)

Table 3 shows the year-on-year growth rates for total Internet sales by sector and the proportion of sales made online in each retail sector.

The retail industry is divided into 4 retail sectors:

• predominantly food stores (for example, supermarkets, specialist food stores and sales of alcoholic drinks and tobacco)

• predominantly non-food stores (for example, non-specialised stores, such as department stores, textiles, clothing and footwear, household goods and other stores)

• non-store retailing (for example, mail order, catalogues and market stalls)

• stores selling automotive fuel (petrol stations)

In November 2015, for every pound spent in the retail industry:

• 41 pence was spent in food stores

• 42 pence in non-food stores

• 7 pence in non-store retailing

• 10 pence in stores selling automotive fuel

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

Figures 4 and 5 show the contribution of each sector to the quantity bought (volume) and amount spent (value) in the retail industry between November 2015 and November 2014.

In November 2015, all 4 main retail sectors saw an increase in the quantity bought (volume). The largest contribution came from the non-food stores sector.

In November 2015, 2 out of the 4 main sectors (non-food stores and non-store retailing) contributed to the increase in amount spent (value). The largest contribution came from the non-food stores sector.

Table 4 shows how sales varied among different-sized retailers. It shows the distribution of reported change in sales values of businesses (from the RSI sample), ranked by size of business (based on number of employees). Businesses with 40 to 99 employees saw the largest growth in the amount spent in November 2015 compared with November 2014 (15.8%). Businesses with 100 and over employees showed growth of 2.2%.

Figure 6 compares a rolling 3 month period with the same period in the previous year and highlights that retail sales started to grow strongly from mid-2013. Since January 2015, the retail sales growth rate has fluctuated around the 4.0% to 5.0% range, which is higher than just before the downturn. Moreover, the latest data shows a strengthening in retail sales growth to 5.3% in the 3 months to November 2015, when compared with growth of 4.9% in the 3 months to October 2015.

Three distinct periods emerge from Figure 6. Between November 2006 and July 2008, retail sales volumes were experiencing continuous growth, although to a different degree, with the volume of sales increasing by 1.3% over the period as a whole. Growth in inflation (Consumer Prices Index CPI) was lower than average weekly earnings over most of this period; which resulted in rising real earnings, an indicator of the purchasing power of consumers.

However, between August 2008 and May 2013, the volume of retail sales fluctuated between periods of contraction and expansion and as a result, broadly the same volume of sales were recorded towards the beginning and end of the period. This weakness may be partly explained by the economic climate over this period. Growth in average weekly earnings was lower than inflation over most of the period, which implies that earnings fell in real terms. However, the volume of retail sales increased by 2.1% between August 2008 and May 2013 despite a larger increase in value of 12.9% over the period, reflecting rising prices between these dates.

The third period shown in Figure 6 started in June 2013, when growth in volume terms began to increase notably, despite average weekly earnings growing at a slower rate than CPI until September 2014. In mid-2013, prices in retail outlets began to fall and this accelerated throughout most of 2014 and 2015, coinciding with higher growth in the volume of retail sales over this period. In addition, this upturn in spending has been accompanied by a decline in the savings ratio, from an average of 9.0% over the period 2008 to 2012, to an average of 5.6% over the period 2013 to 2014.

Figure 7 plots the volume measures of the retail sales index (RSI) and household final consumption expenditure (HHFCE) on a quarterly basis, this shows that the 2 series closely track each other for most of the period. However, the discrepancies between the 2 series can be explained by the differences in coverage between the 2 measures. HHFCE includes expenditure on goods or services across the whole range of industries, while RSI covers only quantity bought and amount spent in the retail industry. Prior to the economy’s downturn (Quarter 1 (Jan to Mar) 1997 to Quarter 1 (Jan to Mar) 2008) HHFCE and RSI grew steadily at compound average growth rates of 0.9% and 0.8% per quarter, respectively.

During the economy’s downturn between Quarter 1 (Jan to Mar) 2008 and Quarter 2 (Apr to June) 2009, HHFCE contracted by 5.7%, as uncertainty about the economy led to people deferring consumption and increasing their savings, indicated by the 6.1 percentage point increase in the savings ratio. Over the same period, RSI declined only marginally (0.8%) and it remained relatively flat until Quarter 1 (Jan to Mar) 2013.

HHFCE returned to growth in Quarter 3 (July to Sep) 2011, growing at a compound average growth rate of 0.6% per quarter between Quarter 3 (July to Sep) 2011 and Quarter 3 (July to Sep) 2015 while RSI returned to strong growth in Quarter 1 (Jan to Mar) 2013, growing at a compound average growth rate of 1.0% per quarter between Quarter 1 (Jan to Mar) 2013 and Quarter 3 (July to Sep) 2015. As a result of the return to growth, in Quarter 3 (July to Sep) 2015, HHFCE and RSI were 4.8% and 9.8% above their respective values in Quarter 1 (Jan to Mar) 2008.

The only international estimate of retail sales available for November 2015 was published by the US Census Bureau on 11 December 2015. In its advanced retail sales estimates for November 2015, the amount spent in the US retail industry, including motor vehicles and parts and food services, increased by 0.2% from the previous month and increased by 1.4% compared with November 2014. Total sales for the 3 months to November 2015 were up 1.7% from the same period a year ago.

The latest estimates of the volume of retail trade across the European Union, from Eurostat for October 2015, show the seasonally adjusted volume of retail trade decreased by 0.1% in the euro area (EA19) and remained stable in the EU28 when compared with September 2015. Compared with October 2014, the retail sales index increased by 2.5% in the EA19 and by 3.1% in the EU28. Note that an accurate comparison cannot be made as Eurostat data are calculated on a 2010 = 100 basis, while data for Great Britain are calculated on a 2012 = 100 basis.