Period covered: December 19Published: January 09, 2020Read time: 1min

Retail Sales Monitor

Dec 19: UK Retail Sales Monitor

Difficult Ending to a Tough Year

Helen Dickinson OBE, Chief Executive, BRC: 

“2019 was the worst year on record and the first year to show an overall decline in retail sales. This was also reflected in the CVAs, shop closures and job losses that the industry suffered in 2019. Twice the UK faced the prospect of a no deal Brexit, as well as political instability that concluded in a December General Election - further weakening demand for the festive period. The industry continues to transform in response to the changing technologies and shopping habits. Black Friday overtook Christmas as the biggest shopping week of the year for non-food items. Retailers also faced challenges as consumers became both more cautious and more conscientious as they went about their Christmas shopping.   

“Looking forward, the public’s confidence in Britain’s trade negotiations will have a big impact on spending over the coming year. There are many ongoing challenges for retailers: to drive up productivity, continue to raise wages, improve recyclability of products and cut waste. However, this takes resources, so it is essential the new Government makes good on its promise to review, and then reform the broken business rates system which sees retail pay 25% of all business rates, while accounting for 5% of the economy.”

Paul Martin, Partner, UK Head of Retail, KPMG: 

“At first glance retailers’ relentlessness paid off in December, with total sales up 1.9%. However, the later timing of Black Friday will have skewed the outcome. If looking at November and December combined, sales actually declined by 0.9%.

“Consumers clearly favoured logging on to walking in, with online sales up 12.8% in December. However, if taking a two month average, growth online was clearly muted at only 2.6.%.

“Grocery is usually a winner during the festive season, although it is important to highlight that growth has been weakening recently and for many players Christmas did not deliver the results it has in the past.

“All growth will be welcome, although the true performance of Christmas trading is still to be determined. The cost of customer returns must not be overlooked. That’s especially true as online fulfilment already costs retailers a pretty penny. Christmas trading reports will likely be mixed, but those that have truly performed well will have managed margin and costs well over both the Christmas period and beyond.”

Food & Drink sector performance, Susan Barratt, CEO, IGD: 

“December’s food and grocery sales ended 2019 on a downbeat note. Despite the influence of some inflation across the market, shopper spending was not as expected for such a key sales period. As a result, while the value of spending wasn’t down, growth was negligible and volumes declined - a rarity for Christmas in recent times.

“Despite their financial confidence remaining subdued, shoppers appear to be a little bit more optimistic for 2020. Fewer expect food prices to be more expensive, with 75% of shoppers taking this view compared with 78% in November. This is also first time since June’18 that just as many shoppers predict they will focus more on quality as saving money in the year ahead when food and grocery shopping (18%). With healthy options one of the top ways shoppers define products as higher quality, retailers and suppliers have an opportunity to engage with shoppers looking to improve their diets this month. As health remains the biggest driver for following a vegan or vegetarian diet we anticipate the plant-based trend to continue to gain traction.”