Black Friday biggest ever for online as store sales dip

Online stole the show during the Black Friday discounting period, as it continued to dominate over in-store sales.

According to the latest data from the BRC-KPMG Retail Sales Monitor, online sales of non-food products grew up 6.5 per cent in November, with the online penetration rate increasing from 26.3 per cent in October 2016 to 27.4 per cent in October 2017.

In the three months to November, in-store sales of non-food items declined by three per cent on a total basis, and by 3.7 per cent on a like-for-like basis.

On a 12-month basis, the total decline reached 2.2 per cent – the deepest since records began in January 2012.

November saw overall UK retail sales increase by 1.5 per cent on a like-for-like basis from November 2016 when they increased by 0.6 per cent.

On a total basis, sales rose by 1.5 per cent in November, compared with a growth of 1.3 per cent in November 2016.

In the three months to November, non-food sales in the UK fell by 1.2 per cent on a like-for-like basis and 0.6 per cent on a total basis.

This was the lowest three-month average non-food total growth since May 2011, excluding Easter distortions.

The IMRG MetaPack UK delivery Index also backed the trend for online shopping increasing, finding that online retail delivery order volumes had increased by almost 17 per cent in October, compared with a year ago.

However, the number of orders being delivered on time fell by 7.4 per cent compared with October 2016.

IMRG claimed the reason for this was likely to be the increasing provision for next-day and specified-day deliveries, which accounted for 47 per cent of UK orders in October.

British Retail Consortium chief executive Helen Dickinson said: “November brought relief as growth in retail sales perked up after last month’s dip. Black Friday, the big retail event of the month, failed to fundamentally shift underlying trends in spending. Food sales were responsible for pretty much all the growth this month as higher prices continue to absorb more of the weekly shopping budget. Non-food sales – the focus of Black Friday – fell, as the squeeze on household incomes continues to impact discretionary spend.

“That’s not to deny that Black Friday was a significant event. Sales of non-food products that week were over 40 per cent higher than in the other weeks of the month, while it was the biggest week ever for non-food products online. However, rather than increasing overall sales, the event has shifted spending away from other parts of the festive period, and focuses shoppers’ attentions online and away from stores.

“There was a mixture of performances across the industry over Black Friday itself, with retailers reporting shoppers being tempted solely by generous promotions, but resisting other items. Gaming, wearable tech and ‘internet of things’ performed well, while toys – last year’s star performer – saw sales sharply down this year.

“This year’s Black Friday has demonstrated that in such a tough economic environment, consumers have become ever more careful, willing to wait and deploy their discretionary income only when they see an exceptional bargain. That heralds a challenging festive period ahead for retailers and shoppers alike.”

Paul Martin, head of retail at KPMG, commented: “Retailers will be wondering whether the juice is worth the squeeze, with Black Friday sales resulting in a meagre 0.6 per cent uptick in like-for-like growth, when compared to November last year. In what has been a difficult year for the industry, any growth is most welcome, but profitability is what remains paramount.

“Despite Cyber Monday falling outside November’s figures, sales growth was clearly more prominent online, with non-food online sales up 6.4 per cent on last year and penetration rates as high as 27.4 per cent. After previous in-store stampedes, it is clear that retailers are increasingly moving Black Friday away from the high street.

“In what remains of this year, the difference between success and failure will be akin to retailers walking a tightrope. Retailers would be wise to focus on differentiation, personalisation and ensuring the availability of their products in the coming weeks.”

Rupal Karia, commercial sector managing director at Fujitsu, said: “These latest figures point to one simple truth: consumers continue to be conscious of where and how they spend their money. The fact that growth was entirely driven by food purchases while spending elsewhere fell suggests that people are less willing to treat themselves. The search for value will continue, and retailers must think of how they can attract customers who are increasingly aware of how to make the most of their budget.

“Fujitsu’s own recent Forgotten Shop Floor study found that eight-in-10 consumers reported they would spend more with retailers that have a better technology offering. This means that, while high-street stores still hold huge opportunities, those unwilling to embrace technological advancements will fail to thrive.

“In times of ever-increasing customer expectation and desire for instant gratification, it is imperative that retailers ensure they are moving forward and adapting their offerings to match the ever-changing consumer behaviour.”