United Kingdom retailers report worst Christmas since 2008

11 Janvier, 2019, 15:44 | Auteur: Auguste Feret
  • Shoppers look for bargains in Selfridges department store during the Boxing Day sale

On a same-store basis, United Kingdom retail sales slipped 0.7 per cent, compared with a 0.6 per cent uplift in December 2017.

While more business moved away from stores to the web, the joint British Retail Consortium-KPMG report showed that online growth slowed to 5.8 per cent from 7.6 per cent. Non-food sales at stores open for at least a year dropped by almost 4 per cent in the three months to December, while food sales rose by 0.6 per cent. It meant that the slice of sales going to online retailers edged above 31% - increasing from 29.1% of total sales in December 2017 to 31.2% last month.

Paul Martin, UK head of retail at KPMG, said: "Retailers experienced little festive cheer this year, with total sales in December delivering zero growth on last year".

The company's impromptu trading update was enough to fuel fears of a Christmas catastrophe for United Kingdom retailers, coming off the back of a turbulent year in which former high street stalwarts like the House of Fraser collapsed.

John Lewis, Ted Baker, Joules and Shoe Zone are among the retailers to have defied jitters with better-than-expected Christmas sales.

Non-food retail sales fell by 3.9 per cent on...

The BRC said price cuts appeared not to have been enough to encourage shoppers.

Although overall consumer spending rose by 1.8 per cent, this was the slowest growth since March 2016 and was a contraction in real terms when inflation is taken into account.

Barclaycard said growth in sales of essentials dipped to its lowest level since 2016, while clothing had a third consecutive month of falling sales.

Marks & Spencer saw its sales drop over the Christmas holiday period.

Analysts have also pointed to the rise of Black Friday as a source of woe for stores, with the November sales extravaganza shifting discounts to earlier in the year and impacting stock control for retailers.

A shop front displays its Black Friday sales in Oxford Circus
Image Black Friday discounts failed to deliver a big enough boost to lift high street sales in November

"Despite this, we had a positive Christmas trading period, thanks to the extraordinary efforts of partners in our business".

John Lewis said sales in the seven-week Christmas period were 1.4% higher than for the same period a year ago.

Footfall for the last Saturday on already struggling United Kingdom high streets plummeted more than 9% compared with the same time previous year, chiming with reports from the sector that consumers had become more cautious with their spending against a backdrop of uncertainty around Brexit and fears of a weakening economy.

"The worst December sales performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger".

BRC chief executive, Helen Dickinson urged the Government to reform the "broken" business rates system and champion the future of retail in the UK.

She added: "The retail landscape is changing dramatically in the United Kingdom, while the trading environment remains tough".

The sluggish figures will make for grim reading for the retail sector, which is struggling to cope with a decline in footfall due to digital competition, as well as a rise in business rates and growing wages.

Halfords issued a profits warning.

Paul Martin, the United Kingdom head of retail at the survey compilers KPMG, said retailers had slashed prices to attract shoppers but had seen only modest returns for their efforts.

"Growth in food did provide a glimmer of hope, being among the few categories to notice an uptick", he added.

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