UK Electricals Sector Report summary
November 2023
Period covered: Period covered: 01 - 28 October 2023
3 minute read
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Electricals sales
Electricals sales fell xx% YoY in October, according to the Retail Economics Retail Sales Index (value, non-seasonally adjusted) against a xx% decline a year ago.
This was the xx consecutive month of decline for the category, as products have fallen out of cyclical demand. Energy efficient home items remain a highlight, but the rush for items such as air fryers and heated clothes dryers last year has not been replicated to the same degree.
Indeed, a year ago, demand was strong for energy-saving devices such as heated clothes dryers and air fryers to combat rising energy prices which surged in the winter months.
Demand weak
Despite headline annual inflation easing sharply to 4.6% in October, and earnings growth rising by a strong 7.7% (3-months to September), cost of living pressures remained at the forefront of consumers' minds.
Insights from the ONS Opinions and Lifestyle Survey showed that around xx of adults reported their cost of living had increased compared with last month.
The tough backdrop saw consumer confidence plunge nine points to -30 in October, noticeably weaker than analyst forecasts which had expected a small improvement to -20 for the month, reversing some the gains made in over the summer.
Worryingly, the major purchases index fell 14 points to -34 in October, which raises the potential of a more muted Golden Quarter than retailers might have anticipated – and this certainly was the case in October.
Golden quarter
The festive period remains a prime opportunity for brands to tap into new customer segments and build loyalty with existing ones. There are mixed views on how trading might unfold within the sector.
Currys anticipates strong Black Friday sales, particularly for energy-saving products like air fryers as consumers continue to look to save money this winter.
A recent Currys survey revealed that over a third (36%) of British consumers are likely to buy refurbished tech in the winter sales.
It expects to make a large chunk of its sales in the golden quarter over the Black Friday weekend. While a cautious consumer attitude is noted, the retailer expects Black Friday to remain a key event in the festive shopping season.
These comments were supported by the CEO of N Brown who expects electricals to do well with consumers searching for great deals, amid cautious spending intentions.
However, Ao.com's CEO disagrees, and suggests that Black Friday's growth in electricals is not as significant as in previous years, due to much of the demand this year being led by the replacement of broken items rather than waiting for sales events.
Uncertainty around how consumers will fuel consumption, given the erosion of excess savings amassed during the pandemic through the cost of living crisis, provides a challenging backdrop for peak trading season.
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£7.9bn worth of retail theft in 2023
Source: Retail Economics, Thruvision
