2020 worst year on record for retail growth

Retail sales were at an all-time low last year, with the traditionally busy Christmas period offering no respite, according to the latest BRC-KPMG retail figures.

In 2020 overall, in-store sales of non-food items dropped 24 per cent compared to 2019.

Last year total sales declined 0.3 per cent compared with 2019, with food growth at 5.4 per cent, and a non-food decline of 5 per cent for the year.

Over the three months to December, in-store sales of non-food items declined 24.7 per cent in total and 14.4 per cent on a like-for-like basis.

According to the BRC-KPMG retail sales monitor for December, the like-for-like excluding temporarily closed stores remained in decline.

On a total basis sales increased by 1.8 per cent in December, against a growth of 0.2 per cent in the previous year.

This is below the three-month average growth of 2.5 per cent and above the 12-month average decline of 0.3 per cent.

Over the three months to December, food sales increased 6.8 per cent on a like-for-like basis and 7.3 per cent on a Total basis.

This is higher than the 12-month total average growth of 5.4 per cent, with the month of December seeing a growth in food sales year-on-year.

Online non-food sales increased by 44.8 per cent in December, against a growth of 6.7 per cent in December 2019.

“Covid has led to 2020 being the worst year on record for retail sales growth,” said Helen Dickinson OBE, chief executive of the British Retail Consortium. “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.”

She warned that with shops still closed for the foreseeable future, costing stores billions in lost sales, many retailers are struggling to survive.

She urged the government to extend business rates relief to prevent further loss of shops and jobs in retail.

“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,” said Paul Martin, UK head of retail, KPMG. “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.”

He added: “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.”

He predicts that consumer behaviour will continue to evolve and said that retailers must embrace these changes in order to keep 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,” he said. “Retailers will also be hoping that the reopening of high streets and shopping centres will see a return to more normal levels of footfall.”

IGD’s chief executive Susan Barratt commented on food and drink sector performance last year: “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.”


Alibaba’s UK general manager, David Lloyd, commented on the BRC-KPMG retail sales monitor – December: “While December was understandably an improvement on November for high street retailers, it still marked a turbulent month as businesses tackled changing restrictions across the UK. The one consistent upside remains online sales, where we’ve seen another month of positive growth.

He added: “With consumers doing more and more of their shopping online, retailers and brands need to work to turn online shoppers into loyal customers. Retailers must create e-commerce experiences, as consumers want more than just convenience while online: they want to be entertained and inspired. We’ve already seen brands invest in technologies such as virtual reality stores and livestream personal shopping services, in a bid to create that in-store experience, online. With another lockdown now in place, brands need to invest in creating engaging digital experiences for shoppers, or risk falling further behind in the battle for survival.”

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