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Industry News

Published on January 9th, 2018 | by The GC Team

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December brings little sparkle for retailers

UK retail sales increased by just 0.6% on a like-for-like basis in December, down from the 1.0% rise recorded in the same month of 2016.

The BRC today said in-store sales of non-food items declined 4.4% on a like-for-like basis during the final three months of the year, the deepest since its records began in December 2012.

Food sales increased 2.6% over the three-month period, while non-food retail sales fell 1.9%.  

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said the divergence between growth in sales of food and non-food has never been so stark.

“With inflation outpacing income growth, shoppers continued to see more of their spending power absorbed by essential items, including food, leaving less left over for buying Christmas gifts.

“That made this year’s festive period all the more nail-biting for non-food retailers, many of whom offered deep discounts in the last weeks before Christmas in the hope of something to celebrate at the end of a year which has seen, on average, zero growth in non-food sales.”

Dickinson added that the promotions came as a welcome relief for stretched households, although the late lift in sales came at the expense of margins for many retailers.

“Retailers who did well in such a challenging environment got both their discounting strategy and omni-channel offerings right. Those who could offer and deliver on last-minute delivery options did better, boosting online non-food sales more than 15% in the seven days before Christmas, a week when, until now, shoppers would have had to turn to stores to ensure gifts made it under the tree in time.”

Online sales of non-food products grew 7.6% in December, which was below the 12-month average of 8.0% but above the 3-month average of 6.2%.

Commenting on the disparity between store and online sales, Paul Martin, Head of Retail at KPMG, said: “Whilst a proportion of this divide can be attributed to Cyber Monday, shoppers are increasingly preferring to shop online, especially at Christmas.

“2017 presented retailers with a cocktail of geopolitical and economic uncertainty, on-going margin pressures and the structural changes driven by technology and changing consumer behaviour.

“In a market that will at best see stagnant growth in 2018, gaining market share will be a primary focus. That will entail understanding your customers fully – including where, when and how they want to shop.”

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