Following months of consistent negative growth against a backdrop of continued challenges, including the cost-of-living crisis and postal strikes, Black Friday “brought retailers a small sigh of relief”.
According the IMRG Capgemini Sales Index, retailers collectively defied the odds and achieved +0.7% year-on-year growth in November. While that figure is low and suggests some customer hesitancy, it marks the first moment of positive-territory growth in the index since April 2021.
Traffic to online retail sites peaked at +2.7% year-on-year in the week commencing 13 November 2022, predominantly owed to early Black Friday activations, which were particularly strong across beauty, home and electrical products. However, there was a decline in traffic in the week commencing 20 November, at -6.1% year-on-year, signalling customers’ response to early campaigning.
As predicted, the number of retailers launching Black Friday campaigns was higher this year. However, the early activations did not deliver increased revenue. When comparing the average revenue share across retailers that increased the length of their Black Friday campaigns by a week or more, there was very little difference between 2022 vs 2021, ranging from 1-3%.
Data from Black Friday week itself (21 – 28 November) revealed that the total market had a slightly better performance than anticipated, at +0.3% year-on-year. Health and beauty, and electricals, saw the highest growth levels at +3.8% and +2.8% year-on-year retrospectively, while clothing experienced the biggest decline of -1.1%.
Andy Mulcahy, Strategy and Insight Director at IMRG, said: “November came in above expectation, which meant the month as a whole saw overall demand increase. This was surprising when it has been so low for the whole year. It does feel like that volume may have been pulled forward, with people doing their Christmas shopping earlier this year to take advantage of discounting to a greater extent than normal.
“Online sales for the first week of December were down -8.1%, which supports that idea. The coming period will be defined by delivery problems too, with all carriers struggling with the additional volumes due to the Royal Mail strikes.”
Simon Binge, Commerce Senior Manager at Capgemini, commented: “Whilst any sign of year-on-year growth can be seen as good news, the context is likely to be a cause for concern for retailers. Early campaigning failed to stimulate demand over Black Friday week and, as the data suggests, may have contributed to the traffic declines witnessed in the week commencing 20 November.
“Furthermore, if consumers have indeed brought forward their Christmas spend to capitalise on discounts, then retail could be in for a rough December, especially given the Royal Mail strike activity and its impact on consumer behaviour. If the net effect on sales for November and December ends up being negative, we’re likely to see significant activity in January as retailers fight to clear seasonal stocks and take share of an ever-shrinking consumer wallet.”
Earlier today the ONS revealed a surprise drop in overall retail sales for November, though the figures do not take into account Cyber Monday sales.