Buoyant online sales fail to mask high street slump after BRC figures show total growth for December failed to beat inflation
The troubled UK high street took a further battering in December, when store sales fell once healthier online sales were stripped out – the first Christmas since 2008 that this has happened.
In what was described by retail analysts as “a flat end to a flat year”, industry figures reveal that sales in the key trading month edged up only 0.3% on a like-for-like basis from December 2011, when they had risen 2.2% on the preceding year despite the challenges of the snowy weather.
Total sales across food and non-food rose by 1.5%, against a 4.1% rise in December 2011. But in-store sales “turned negative” and fell once online sales were stripped out, the British Retail Consortium said.
Online sales shot up by 17.8% – the fastest rate for a year – as shoppers with smartphones and tablets took advantage of more sophisticated websites and increasingly popular “click-and-collect” services.
The closely scrutinised figures are being published by the industry on Tuesday in the British Retail Consortium-KPMG Retail Sales Monitor for December 2012, based on core data supplied by BRC members, which comprise some 80% of the UK retail sector.
So-called Cyber Monday, the first Monday in December, kickstarted the Christmas trading period, and John Lewis, House of Fraser and Next, the first to provide Christmas trading updates, reported a surge in online sales.
Helen Dickinson, the incoming director general of the BRC, said: “Against the relentlessly tough economic backdrop and low expectations, these results are not a cause for celebration, but not a disaster either. Total growth for December hasn’t beaten inflation and is only on a par with December 2010, when severe weather put sales volumes on ice for much of the month.”
She said online was “the standout performer, showing its highest rate of growth this year. Shoppers are increasingly taking advantage of the convenience that online shopping offers at every stage of the customer journey, from comparing prices to reserving and collecting in-store.”
But despite the sharp growth in internet sales, as a standalone sector, they account for an estimated 10 to 12% of total retail sales, Dickinson pointed out. The timing of Christmas meant that after a “sluggish start” the final few days leading up to 25 December saw a last-minute sales boost. Footfall was disappointingly low, but when people did make shopping trips they bought a lot in one go.
David McCorquodale, head of retail at KMPG, said: “A flat end to a flat year is perhaps the best way to describe the Christmas trading for 2012. Despite mild, albeit wet, weather for the whole of the last quarter and an extra full weekend immediately prior to Christmas, the final quarter saw total sales rise only 1.5% on the previous year and like-for-likes rise by only 0.2% – both rises lower than inflation.
“January will be a tough month for retailers as consumers face up to their credit card bills after Christmas, and it’s likely 2013 will bring more of the same challenges. There will be no boom and it is likely more than a few will go bust.”
Joanne Denney-Finch, chief executive of IGD, said: “The focus on eating and drinking over the festive period helped retain the week leading up to Christmas as the biggest of the year, in terms of food and grocery sales. But taken as a whole, December’s performance was relatively flat. Yet again shoppers left it even later than the previous year to do their Christmas grocery shopping, with a strong final two weeks offsetting a slow start to the month.”
The challenging conditions would continue into this year, she added: “Our ShopperVista research shows that over half of shoppers (51%) are aiming to save money on their grocery shopping over the next six months. This figures rises to 67% of families with teenagers.”
Dickinson added: “Retailers will be hoping that a continuing boost from post-Christmas sales events strengthens January’s figures but, unfortunately, there are few signs that their sense of ‘running fast to stand still’ is likely to ease off any time soon.”
Personal finance and money news, analysis and comment | guardian.co.uk
There are no comments yet. Why not be the first to speak your mind.