The Retail Note - Retail sales: the curse of Black Friday strikes?

Key Messages

• Oct retail sales solid rather than spectacular
• YoY retail sales values +3.0%, volumes +1.2%
• Implied shop price inflation of 1.8% lower than headline inflation of 3.6%
• MoM volume growth -1.1% much worse than economist consensus (-0.0%)
• Marginal deceleration on strong Sep (vals +3.5%, vols +1.7%)
• Grocery sales still questionably weak (vals +1.6%, vols -2.0%)
• Non-food sales growth far stronger (vals +3.1%, vols +2.3%)
• Limited evidence to suggest consumers deferring purchases to Black Friday
• Charity Shops, Books, Specialist Foodstores standout categories
• Strong performance from Clothing (vals +5.8%, vols +4.6%)
• Challenging month for Textiles, Footwear, Chemists
• Online sales decline -0.8% MoM, but up +4.8% YoY
• Online penetration flat at 28.1%
• Decent start to the festive trading period
• Momentum should build through Nov and Dec
• Risk is that it spikes in Nov and tails off in Dec. 

Here we go. Fairly decent retail sales figures misrepresented as weak. Black Friday and the Autumn Budget the cause. And Christmas is going to be a write-off. The narrative was written even before today’s figures were released.

October’s figures were lower than September’s – because they always are. We spend more in September than we do in October. Always have done, always will. The quarter-on-quarter numbers were stronger because they included September. We spend more in the August – October period that we do in the May – July period. Always have done, always will. The complexities of the seasonality of retail in very simple terms.

The real indicators of underlying performance will always be in the year-on-year figures, which at least give a like-for-like comparison. On this basis, the October figures were decent, but did show a deceleration on previous months.

The headline stats

In their accompanying narrative, the ONS did at least major on the quarter-on-quarter figures, which put a more positive spin on things. Nevertheless, the economist community remains obsessed with month-on-month ones, which painted a far less rosy picture.

The most meaningful year-on-year figures were as follows: retail sales values (exc fuel) grew by +3.0% in October, while volumes (exc fuel) were ahead by +1.2%. In both cases, this marked a mild deceleration on the YoY growth reported in September (values +3.5%, volumes +1.7%), but above the monthly average run-rate YTD (values +1.7%, volumes +0.3%). Implied shop price inflation in October was a comfortable +1.8%, but much higher in food (+3.6%) than non-food (+0.8%). All fairly decent.

But, of course, the main analyst focus is on the largely meaningless month-on-month figures. Retail sales volumes were down by -1.1% in October, far worse than the ‘will-they-ever-get-it-right-or-even-come-close’ economist consensus forecasts of -0.0% ‘growth’. But read earlier comment re. seasonality in retailing that no amount of mathematical adjustment can actually reflect.

The quarter-on-quarter figures that the ONS majored on showed volumes were up +1.1% in the three months to October 2025, largely on account of an increase of +0.7% in September (revised up from a +0.5% rise previously) and of +0.5% in August (revised down from a +0.6% rise previously). Again, see previous comments re. seasonality, but effectively what we’ve seen is a strong August, a stronger September and a slightly more anaemic October. Nothing more, nothing less. No cause for celebration, no cause for corcern.

Of course, Black Friday was always going to rear its hideously ugly head, as the ONS observed: “Supermarkets, clothing, and mail order retailers fell in October 2025, which some retailers attributed to consumers delaying their spending in the lead up to Black Friday”. Which seems highly improbable in that many retailers already ran Black Friday ‘promotions’ throughout October. Either these early Black Friday promotions failed to deliver incremental spend growth, or consumers are actually holding out until November in the hope of even greater ‘bargains’, leading to an unhelpful trough-peak-trough demand pattern. Neither scenario a good one for retailers.

Performance by sector

 The usual disparities between individual sub-sectors. Grocery sales remain questionably weak. Foodstore values grew by just +1.6% year-on-year, but this was purely inflationary (+3.6%), with volumes down -2.0%. According to the ONS, grocery volumes have been in decline all year, a narrative not supported by the operators themselves. But within grocery, Specialist Food Stores saw stellar growth (values +15.9%, volumes +10.9%), signaling, on the surface at least, an unlikely flight from mainstream operators towards smaller players.

All non-food saw value growth of +3.1%, with volumes up a very healthy +2.3%. In common with previous months, Charity Shops were the top performing category (vals. +25.4%, vols. +24.8%), followed by Medical Goods (+20.8%, +16.5%) and Books, Newspapers and Periodicals (+18.9%, +17.7%). Singled out by the ONS as having a weaker month, Clothing sales continued to grow strongly YoY (+5.8%, +4.6%).

At the other end of the performance spectrum, another very challenging month for Textiles (values -27.0, volumes -27.4%), Footwear (-6.4%, -5.2%), Chemists (-6.2%, -8.8%), Cosmetics (-4.4%, -5.0%) and Carpets (-3.0%, -6.7%).

Any evidence of Black Friday affecting demand patterns is largely inconclusive, the three key Black Friday categories (white and brown electrical goods and toys) all moving in different directions. Sports, Games and Toys had a bad month (-5.5%, -5.9%), seemingly supporting the notion that consumers delayed purchases on these items until the ‘deals’ come in in November. But Electricals (+5.0%, +6.7%) and Computers & Telecomms (+7.2%, +11.6%) completely debunk this as a possibility. Or perhaps, consumers took advantage of Black Friday ‘deals’ that started in October, well ahead of Black Friday itself. Or ‘deals’ that weren’t actually ‘deals’ in the first place…

According to the ONS “some online retailers also mentioned delayed spending in the lead up to Black Friday”. Anecdotally maybe, but this wasn’t really manifest in the numbers. Online sales values fell MoM by -0.8%, but grew +3.0% QoQ and +4.8% YoY. Online penetration remained flat at 28.1% in October compared with September.

For more detail please refer to the accompanying Retail Sales Dashboard.

Wider Xmas predictions

Neither a triumph nor a disaster, the October figures mark a solid start to the Christmas trading period (or Golden Quarter, if you must). The hope is that momentum builds in both November and December. The fear, as ever, is that demand spikes in November and tails off in December.

Last week’s Retail Note detailed Knight Frank’s predictions for retail sales over Christmas, coupled with a good old anti-Black Friday rant. I’ll finish this one by giving wider context on my expectations for Christmas beyond the hard numbers:

• Retailers universally declare Black Friday a triumph
• The reality is anything but (lowest common denominator retailing at its worst)
• Someone will come up with Sat 20^th Dec being ‘Panic Saturday’, which the media will love
• Mon 22^nd and Tues 23^rd Dec will actually be the busiest shopping days of the year
• Footfall figures will be released within 2/3 days of Christmas Day – footfall will be down
• They will paint a very distorted view of Xmas trade, but the media will latch onto them
• School-boy error/confusion between Black Friday (a promotion) and Boxing Day (a sale)
• Next will be one of the first major retailers to report – and its figures will be very good
• Aldi and Lidl will be hot on their heels, both declaring ‘record Christmases’
• But both have far more stores than ever before, so of course Xmas sales will be ‘record’
• Both will sell a gazillion mince pies and brussel sprouts, but neither will give a l-f-l figure
• Tesco and Sainsbury’s will both perform well, but ongoing question marks over Argos
• Grocery retailers will report that consumers traded up, rather than down
• M&S a strong performer on the non-food side
• In fact, very few retailers release poor Christmas trading statements
• BRC retail sales release (due Tues 6 Jan) will be downbeat
• Official ONS retail sales release (due Fri 16 Jan, or possibly Fri 23 Jan) will be all over the place due to an ongoing preoccupation with MoM performance and vain attempts to make sense of the data through aggressive “seasonal adjustment”.

The eagle-eyed may spot an uncanny resemblance to last year’s predictions in these, with a few modifications. Lazy on my part or just experience that many things just happen at Christmas as a matter of course?

Just 33 more shopping days. Whatever you may read in the coming weeks, especially in light of next week’s Autumn Budget, Christmas will still happen, Santa will still come. And consumers will still spend. And spend big.