Retail sales, Great Britain: November 2018

• In the three months to November 2018, the quantity bought in retail sales showed an increase of 0.4% when compared with the previous three months due to growths in non-food stores and online retailing.

• The quantity bought in November 2018 when compared with October 2018 increased by 1.4%, with a strong monthly growth of 5.3% in household goods stores.

• Strong growth of 5.3% in household goods stores provided the largest contribution to overall growth within non-food stores.

• Retailers reported strong growth on the month due to Black Friday promotions in November, which continues the shifting pattern in consumer spending to sales occurring earlier in the year; the non-seasonally adjusted growth rate in November 2018 was 13.2% in comparison with 8.7% in November 2013.

• In November 2018, online sales as a proportion of all retailing exceeded 20% for the first time, with all online retailing accounting for 21.5% of total retailing on a non-seasonally adjusted basis.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the four-week period 28 October 2018 to 24 November 2018.

The official Black Friday day of promotions was on 23 November and is included in our reference period. Cyber Monday, however, will be included in December’s release as it took place on 25 November.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In November 2018, both the amount spent and quantity bought in retail sales showed growth across all measures (Table 1). When compared with the previous month, the amount spent increased by 1.5% and the quantity bought increased by 1.4%, recovering from a decrease of 0.4% in both September and October 2018.

The strongest growth can be seen in comparison with the same period a year earlier where the amount spent increased by 5.0% and the quantity bought increased by 3.6%.

The three-month on three-month movement shows moderate growth at 0.4% for the quantity bought as a more stable measure than the monthly growth rate (Figure 1).

Figure 1 shows the rolling three-month on three-month index against the more volatile monthly path for the quantity bought.

From November 2013, the quantity of goods bought increased at a steady rate to the end of 2016, with a short period of contraction at the beginning of 2017. The underlying pattern returned to a slower rate of growth to March 2018. From April 2018, stronger growth is seen with a continued increase in the three-month on three-month movement. However, in recent months, growth has slowed with a moderate increase of 0.4% in the three months to November 2018.

When compared with the previous month, November 2018 displays a growth of 1.4% in the retail sector after two monthly falls in September and October 2018; both declining by 0.4%. This monthly growth is driven mainly by non-food stores (Figure 2).

Figure 2 displays the contribution to month-on-month growth, with the quantity bought at 1.5 percentage points and the amount spent at 1.4 percentage points.

Non-food stores were the largest contributor towards the overall growth, with the amount spent and quantity bought reporting contributions of 1.1 and 0.9 percentage points respectively.

Fuel and non-store retailing also both positively contributed whilst food stores remained flat on the month.

The largest contribution to the 2.2% growth reported in the quantity bought came from household goods stores at 1.1 percentage points, closely followed by “other non-food” stores at 1.0 percentage point. Other non-food stores include a range of stores such as second-hand goods, watches and jewellery, sporting equipment, games and toys, computers and electrical equipment, books and newspapers, carpets and rugs, cosmetics and toilet articles, and pharmaceutical and medical goods.

Many retailers within these sectors provided evidence of strong sales during Black Friday promotions, which encouraged spending. Much of this seasonal effect, however, is removed during the seasonal adjustment (Figure 4).

Looking at the spending patterns over time shows increased spending in the retail industry on the run up to Christmas. Figure 4 shows spending in the retail industry from 2013 when Black Friday first became established in Britain.

Data supplied by our contributors show how seasonal the retail sales industry is, with large peaks occurring each December. We use seasonal adjustment methods to estimate for these regular impacts, including for recent events such as promotions as part of Black Friday sales. The seasonally adjusted data allows us to compare changes over time and facilitate comparisons between consecutive time periods.

In November 2018, the official day for Black Friday sales was 23 November. However, many contributors began their promotional sales earlier in the month ranging from a weekend to over two-week long sales. This is reflected in the changing levels of activity between November and December in recent years (Figure 5).

Figure 5 shows an evolving pattern in consumer spending between November and December, as growth into December shows a slowdown over the years. In November 2018, the monthly growth rate was 13.2% in comparison with 8.7% in November 2013. In 2013, the growth in December was at 17.6%, slowing to 11.6% in 2017, making it level with the growth in November and showing that spending has spread out over the two months.

It is more appropriate to focus on the seasonally adjusted estimates, which can allow for the evolving changes to consumer patterns over time. The seasonal factor, as calculated by our seasonal adjustment methods, can capture the evolving nature of the sales and remove this from our seasonally adjusted growth rates, as seen in Figure 4.

The largest contribution to the monthly growth in November was household goods stores, particularly the strong growth of 11.0% seen in electrical household appliances. Retailers within this sector suggested that stores took advantage of Black Friday sales, with longer than usual promotions.

In November 2018, online sales as a proportion of all retailing exceeded 20% for the first time, with all online retailing accounting for 21.5% of total retailing on a non-seasonally adjusted basis (Table 2). Non-seasonally adjusted average weekly spending online was £1.8 billion in November 2018; an increase of 13.1% when compared with November 2017. Feedback from retailers across all sectors reported that Black Friday and related promotions had boosted sales in this period.

Non-store retailing continues to be the largest contributor to the growth in online sales. Within this sector a sub-sample (accounting for over 70% of total turnover) of retailers were asked to provide a commodity split of their total turnover. These data enable us to provide an estimate of the commodities sold within the sector (Figure 6).

“Other goods” accounted for the largest proportion of non-store retailing in November 2018 at 31.2%; an increase on the 29.8% reported in October 2018. Household goods also saw an increase in the proportion bought in non-store retail in November; up to 30.9% compared with the 25.8% reported in October, with anecdotal evidence from retailers suggesting the proportional growth can be attributed to Black Friday promotions.

Non-store sales of clothing saw the biggest fall in the proportion sold online; down from 34.7% (the largest proportion) in October 2018 to 30.0% in November 2018.

The only international estimate of retail sales available for November 2018 was published by the US Census Bureau on 14 December 2018. In its advanced monthly sales for retail and food services, November 2018 (PDF, 1.6MB) they include the amount spent in the US retail industry, including motor vehicles and parts, and food services.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 497KB) across the European Union on 5 December 2018 for October 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with July 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates

• standard errors

• revision triangle

• distribution analysis

The Retail sales Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data