Food store sales volumes have risen for the first time in three months, showing a 0.5% increase in November.
- The growth was primarily driven by supermarkets, which experienced the highest rise in sales volumes.
- Overall retail sales saw a modest increase of 0.2%, while the online sector faced significant challenges.
- There was a notable 4.3% decline in online value sales, marking the largest drop since March 2022.
- Industry leaders express concern over upcoming fiscal challenges, including increased taxes and operating costs.
For the first time in three months, food store sales volumes experienced an increase, growing by 0.5% in November. This development is noteworthy as it marks a potential positive shift in retail trends, with supermarkets contributing significantly to this growth.
Despite the positive changes in food store sales, the overall retail sector witnessed a smaller increase, with volume sales rising only by 0.2%. More concerning, however, was the continued decline in the online retail sector, where value sales dropped by 4.3%, the largest decrease since March 2022.
In food stores specifically, online sales fell by 2.9% in November. As a result, the total expenditure, combining both in-store and online sales, increased by just 0.3%. Consequently, the proportion of online sales decreased to 26.2%, marking its lowest point since February 2024.
Kris Hamer, Director of Insight at the British Retail Consortium, highlighted the pressures facing retailers, noting “the £7bn in new costs from the Budget facing the industry in 2025 with increased concern.” He warned that the demands of higher taxes could force retailers to either raise prices or cut costs, potentially leading to job cuts and reduced store numbers.
Additionally, resistance is growing within the retail sector regarding changes to National Insurance contributions, as over 70 UK retailers have voiced their concerns to the Chancellor. The increase in National Insurance contributions, along with other fiscal policies, poses a significant threat to employment within the industry.
The recent rise in food store sales volumes represents a positive trend for the retail sector, but significant fiscal challenges remain on the horizon.
