Period covered: December 20Published: January 12, 2021Read time: 15min

Retail Sales Monitor

Briefly Opened Stores Boost Christmas Sales

Helen Dickinson OBE, Chief Executive, BRC: 

“Covid has led to 2020 being the worst year on record for retail sales growth. Physical non-food stores – including all of ‘non-essential’ retail – saw sales drop by a quarter compared with 2019. Christmas offered little respite for these retailers, as many shops were forced to shut during the peak trading period. Though this led to a rise in food-based gifts as many shoppers bought what they could from the shops that were still open.

“With shops still closed for the foreseeable future, costing stores billions in lost sales, many retailers are struggling to survive. To avoid the unnecessary loss of shops and jobs Government should announce an extension to business rates relief for the worst-affected businesses as soon as possible. With many retailers making decisions over their future, the Government must act decisively.”

Paul Martin, UK head of retail, KPMG: 

“In the most important month for the retail industry, there was some positive growth due to the on-going shift of expenditure from other categories such as travel and leisure.  Once again we saw big swings in the types of products being purchased and the channels used for shopping, with much of the growth taking place online where nearly half of all non-food purchases were made. Household related and food item purchases were top of Christmas shopping lists with historic growth rates in contrast to fashion, accessories and beauty products which experienced double-digit declines. 

“Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street and conditions will continue to be challenging as we enter another national lockdown. Consumer behaviour will also continue to evolve and retailers must embrace the changes if they are to hold on to hard won customers and generate profitable sales.

”Looking ahead, fortunes will be mixed but pent up savings and a successful vaccine roll out will help support recovery in the retail sector later in the year. Retailers will also be hoping that the reopening of high streets and shopping centres will see a return to more normal levels of footfall.”

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

“December 2020 saw the highest ever festive spending in the UK food and grocery retail sector and was largely in line with the elevated trend through the year. Tightening restrictions across much of the country limited other sales channels and enabled supermarkets to get the full benefit of people celebrating with food and drink. Though last-minute changes put the brakes on larger family gatherings, shoppers nevertheless sought to make up for their disappointments by trading up to treat themselves and their immediate households with premium and luxury lines.

“IGD’s Shopper Confidence Index remained stable in December, boosted by the introduction of new vaccines for COVID-19. Focus turned to Christmas food shopping and there was a significant uplift in online grocery shopping over the festive period. Shopper confidence will remain fragile as shoppers grapple with the impact of the new national lockdown, economic downturn and a new relationship with the EU.”