High level of inflation in the U.K. nullifies an increase in store sales

In November, retail sales in the U.K. increased sharply amid promotions for Christmas and the World Cup. However, inflation in the country remains significantly higher than its target level. Consequently, consumers pay more and get less than they could afford earlier.

According to the British Retail Consortium’s data, over the last month, the total value of spending in shops, which have been in the market for more than a year, rose to 4.1% year-on-year. A month before, the total value of purchases was only 1.2%. Therefore, in November, it reached the highest levels since January of this year.

Helen Dickinson, CEO of the British Retail Consortium, noted that store sales growth was mostly driven by Black Friday discounts and the beginning of the holiday season.

Despite the fact that there has been a substantial increase in sales, it failed to outpace the rate of inflation, which currently is 11.1% in the U.K. The volume of purchases continues to decline in comparison to the previous year, when consumers could afford more.

These data show that consumers try to maintain their previous standard of living, even as the purchasing power decreases sharply. But the current situation forces people to spend more money on basic necessities, thereby reducing other spending. A rapid growth of food and energy prices causes concerns in the business sector.

Retail sales of non-food items didn’t change in November, which does indicate a decline in secondary spending.