The latest ONS retail sales figures show volumes dropped by 0.1% in November, driven by a fall in non-store retailing (down 2.9%) and food sales (down 0.5%). That said, household goods rose by 1.8% and clothing was up by 1.7%.

Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, said: “Speculation around potential tax hikes and the wettest weather seen this year dampened retail sales in November. The drop in sales compounded a bleak start to the all-important Golden Quarter, not even Black Friday deals could entice shoppers to splurge ahead of Christmas, with the biggest fall in online.

“Consumer confidence has ticked up in December highlighting a potential budget bounce which will hopefully translate into a late surge in sales as people hit the high street in a last-minute rush. Budget jitters should have subsided now and with no major shocks, confidence should start to improve just in time to turn around fortunes in the Golden Quarter.

“Looking ahead to 2026, retailers continue to face headwinds with low consumer confidence combined with already high employment costs set to rise further as the national minimum wage increases again. Business rates reform could also disproportionately hit larger operators and online businesses presenting a mixed, challenging trading environment next year.

“In addition, consumers continue to be cautious with many opting to save rather than splurge, so retailers need to create a compelling proposition that not only resonates with consumers but tempts them to spend.”

Thomas Pugh, chief economist at RSM UK, added: “The tick down in retail sales volumes in November was mainly driven by a 0.5% m/m fall in food sales, volumes elsewhere rose by 1.0% m/m. That is a good sign that all was not lost in the pre-budget chaos that has heavily weighed on sentiment. However, it did come at a price with heavy discounting meaning retail goods prices fell by 0.2% on the month.

“Looking ahead, the bounce back in consumer confidence to -17 in December suggests that sentiment will improve now that the budget has turned out to be more benign than expected. However, the outlook for consumers is looking a bit tougher next year. A weakening labour market combined with still high inflation means real household incomes are likely to grow by just 0.5% a year.

“The outlook for consumer spending hinges on whether consumers continue with their current elevated levels of saving or pare back saving to support consumption. With the household saving ratio elevated and balance sheets in aggregate looking healthy, there is plenty of room for consumers to save a little less and spend a bit more, if they are confident enough.”

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