1. Main points

  • The underlying pattern in the retail industry in November 2017, as suggested by the three-month on three-month measure remains one of growth, with the quantity bought increasing by 0.8%.

  • When compared with October 2017, the quantity bought in November 2017 increased by 1.1%, with household goods stores showing strong growth at 2.9%.

  • Retailers’ feedback suggests that “Black Friday” events contributed to the monthly increase in household goods stores, with electrical household appliances making the largest contribution to the growth.

  • The year-on-year growth rate shows the quantity bought increased by 1.6%.

  • Total average store prices increased by 3.1% in November 2017 when compared with the same period last year, with price increases across all store types, in particular food stores had the largest price increase of 3.6% since September 2013.

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2. Statistician's comment

Commenting on today’s official retail figures, Rhian Murphy, ONS Senior Statistician said:

“Underlying retail sales growth remained reasonably strong in the last few months. Household goods stores had a good November, with a number of businesses saying that Black Friday promotions boosted sales.”

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3. Things you need to know about this release

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 29 October 2017 to 25 November 2017. Estimates for November 2017 included “Black Friday”, which tends to cover various periods up to 24 November. “Cyber Monday” (27 November) is not covered in this reporting period and will be included in the estimates for December 2017 to be published on 19 January 2018.

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 inflation). Unless otherwise stated all estimates included in this release are based on seasonally adjusted data.

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 Summary Quality and Methodology Information report.

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4. Main figures for total retail sales

Table 1 shows that in November 2017, estimates for the quantity bought (volume) and amount spent (value) in the retail industry increased for all estimates.

Compared with November 2016, the quantity bought increased by 1.6%, while the amount spent grew by 4.7%.

The underlying pattern in the retail industry as suggested by the three-month on three-month measures was one of growth, with the quantity bought increasing by 0.8% and the amount spent increasing by 1.6%. The more volatile monthly growth rate for the quantity bought and the amount spent both increased by 1.1% and 1.4% respectively.

Figure 1 shows growth over time for the rolling three-monthly and month-on-month measures.

Figure 1 shows the rolling three-month on three-month and monthly indices for the quantity bought in the retail industry against the rolling three-month on three-month average store price index.

The underlying three-month on three-month index removes the volatility seen with the monthly path and provides an estimate of the underlying pattern of growth in retail sales. In the early periods shown, the average store prices began to fall following a period of stability along with continued growth in the quantity of goods bought. At the start of 2017, rising store prices led to a period of contraction with three consecutive monthly declines in the quantity bought. Despite store prices continuing to rise, we have seen the quantity of goods bought return to growth from April 2017 onwards.

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5. Year-on-year growth by sector

In November 2017, the quantity of goods bought was estimated to have increased by 1.6% compared with November 2016 due to strong growth in non-store retailing.

Food stores

When compared with November 2016, the quantity bought decreased by 0.1% whilst the amount spent increased by 3.5%, due largely to the increase in average prices of 3.6%.

Non-food stores

Non-food stores increased on the year to November 2017 for both quantities bought and amount spent. Within non-food stores the quantity bought within textiles, clothing and footwear increased by 2.3% showing a rebound from the fall in growth reported in October 2017 and continuing the trend of strong growth seen in the sector throughout 2017. Similarly, other stores also increased by 2.3% despite price increases in both sectors; as a consequence there was strong growth in the amount spent in non-food stores and other stores of 5.2% and 4.6% respectively.

Department stores and household goods stores both showed a fall in growth on the year. While the household goods sector can be volatile, the fall of 0.9% in department stores continues a recent pattern of slowdown in this sector.

Non-store retailing

The quantity bought for non-store retailing increased by 10.4% on the year to November 2017. This follows a long-term pattern of growth in this sector, which is also reflected in the amount spent, with an increase of 13.8%. The large increase in the quantity bought, combined with its weight to the total Retail Sales Index leads to non-store retailing being the largest contributor to growth in November 2017 (Figure 2).

While non-store retailing provided the largest contribution to growth for the quantity bought, more money was spent in non-food stores as the amount spent increased by 1.5 percentage points. The amount spent in food stores increased by 1.4 percentage points, while the quantity of goods bought in-store decreased by 0.1% resulting in a flat contribution to growth.

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6. Explaining the growth in November

When the seasonal effects of shopping for Christmas are removed, we can understand true growths in the retail industry rather than large increases in spending due to seasonality, such as Christmas (Figure 3).

If we look at the non-seasonally adjusted data we can see increases in sales at the end of each year in the run-up to Christmas. When compared with October 2017, in November 2017 the non-seasonally adjusted sales for the quantity bought grew by 12.3% in comparison with 1.1% for the seasonally adjusted growth rates, which demonstrates that consumers have begun purchasing for Christmas. Each peak shown in Figure 3 illustrates the December months.

Although increases in sales relating to “Black Friday” are treated as part of the seasonal adjustment process, this is more challenging than other regularly occurring events as it is a new phenomenon, which has changed over time. For example, this began as a one-day event and now tends to take place over a longer period. This is important when comparing month-on-month estimates.

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7. Contributions to month-on-month growth

In November 2017, the quantity bought in total retail sales increased by 1.1% when compared with October 2017. All sectors demonstrated an increase month-on-month in both the quantity bought and amount spent. Non-food stores, as the highest weight in total retail, contributed most to the 1.1% growth in the quantity bought.

Within non-food stores, household goods stores were the main contributor to the monthly growth, with increases of 2.9% for the quantity bought and 2.5% for the amount spent (Table 3).

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8. A look at growth in household goods stores

Table 3 shows the store types included within household goods stores and their weight to total retail sales.

The growth of 2.9% within household goods stores follows a pattern of growth in the quantity bought within this sector, where we saw increases of 2.8% and 1.9% in September and October 2017 respectively. Consequently, we are seeing an underlying pattern of growth within household goods stores as suggested by the three-month on three-month measures, with an increase of 3.6% in the quantity bought (Table 3).

Furniture, lighting equipment and household articles are the largest contributor to household goods stores, closely followed by hardware, paints and glass. The underlying pattern in the three-month on three-month measure demonstrates that furniture, lighting equipment and household articles performed best in both the quantity bought and amount spent, with growths of 6.3% and 6.2% respectively. However, the month-on-month picture shows the strong growth of 8.6% for the quantity bought in electrical appliances, which contributed the most to the overall growth in this sector, particularly with reduced prices, with the amount spent increasing by 7%.

Feedback from retailers within household goods stores outlined that “Black Friday” sales and promotions had contributed towards this increase.

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9. What's the story in online sales?

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain.

In November 2017:

  • average weekly spending online was £1.2 billion; an increase of 10.2% compared with November 2016

  • the amount spent (value) online accounted for 17.0% of all retail spending, excluding automotive fuel, compared with 16.1% in November 2016

Online sales have continued to increase showing a change in consumer habits from shopping in-store.

Figure 5 demonstrates how each sector contributes to the value growth in online sales. The largest weighting within internet sales comes from non-store retailing, however, in November 2017 the largest contribution to internet sales came from non-food stores at 5.5 percentage points. Food continues to be the smallest contribution to growth in internet sales, contributing only 0.7 percentage points.

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11. Quality and 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

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Contact details for this Statistical bulletin

Rhian Murphy
retail.sales.enquiries@ons.gsi.gov.uk
Telephone: +44 (0)1633 455602