Holiday retail sales in the UK are looking weak despite discounts

We’ve heard plenty about how cash-strapped consumers are seeking discounts and promotions, but over in the UK, things seem to be a bit different.

Despite Black Friday discounts, retail sales in Britain grew just 2.7% in November, as consumers faced rising costs, per a report by the British Retail Consortium (BRC) and KPMG. For comparison, sales in the region grew 4.2% last November.

Categories like jewelry and watches struggled the most to lure customers, who tended to avoid expensive purchases.

The numbers paint a bleak picture for the rest of the holiday season, as retailers have been counting on holiday shopping to boost sales.

“The cost-of-living crisis has taken its toll on Christmas spending for many households, and the continued economic conditions are testing consumer resilience,” Paul Martin, UK head of retail at KPMG, told Business of Fashion. “We are likely to see a prolonged and well-targeted period of discounting as retailers compete hard for a shrinking pool of spend and will need to clear stock.”

Still, executives at BRC remained optimistic that sales could pick up, saying “most people will do the bulk of their present-buying during the first two weeks of December.”

In the US, by contrast, Black Friday shoppers spent a record $9.8 billion online, a 7.5% increase from 2022.

That doesn’t mean US consumers aren’t feeling the burn of inflation, but perhaps they’re dealing with it in different ways. Instead of spending less, many are resigned to taking on debt. Some are even engaging in what’s been called “doom spending,” or buying despite economic challenges to cope with stress, per a recent Credit Karma report Retail Brew covered.

“Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs, which could take a toll on their financial well being,” Credit Karma’s consumer financial advocate, Courtney Alev, said in the report.