Retail sales volumes rose modestly by 0.2 percent in November, only partially recovering from a 0.7 percent decline in October and far below the consensus forecast. Annually, sales volumes were up 0.5 percent, although still 1.6 percent below pre-pandemic levels (February 2020). Growth was driven by supermarkets and non-food stores, with household goods stores and the other retail sub-sector contributing strongly. However, clothing retailers saw a significant decline, marking their lowest sales volumes since January 2022.

Seasonal dynamics influenced the data. While Black Friday promotions were captured only partially, early campaigns boosted November sales. Online sales experienced a sharp drop, the largest since March 2022. Consequently, online sales accounted for 26.2 percent of total spending, their lowest proportion since February 2024, reflecting a shift to in-store purchases.

Recent consumer behaviour reflects only cautious optimism, with economic factors weighing on discretionary purchases like clothing. The broader three-month trend (0.3 percent) indicates slight a recovery momentum, highlighting resilience in essential sectors amidst shifting spending patterns. The latest update lifts the UK RPI to 8 and the RPI-P to 9. This means that economic activity in general is performing just slightly stronger than expected.

Sales are expected up by a modest 1.5 percent on the year.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms. The data are derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes the 900 largest retailers and a representative panel of smaller businesses, including internet sales. Collectively, all of these businesses cover approximately 90 percent of the retail industry in terms of turnover.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.