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Tuesday 07 April 2020

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Worst year on record for retail

Written by Peter Walker
09/01/20

Total sales for 2019 decreased by 0.1 per cent, compared with 1.2 per cent growth in 2018; making last year the worst on record.

This is according to the British Retail Consortium (BRC) and KPMG’s latest market analysis, which revealed that during the five weeks from 24 November to 28 December, sales increased by 1.9 per cent on a total basis, against a flat December 2018.

Taking November and December together to iron out the Black Friday distortions, total sales declined 0.9 per cent compared with the same period in 2018.

UK retail sales increased by 1.7 per cent on a like-for-like basis from December 2018, when they had decreased 0.7 per cent from the preceding year. Again, taking November and December together, like-for-like sales declined 1.2 per cent compared with the same period in 2018.

Over the three months to December, In-store sales of non-food items declined 3.5 per cent on a total and 3.8 per cent on a like-for-like basis – worse than the 12-month total average decline of 3.1 per cent.

Over the same period, food sales were flat on a like-for-like basis and up 0.7 per cent on a total basis. Meanwhile, non-food retail sales in the UK decreased by 1.6 per cent on a like-for-like and 1.4 per cent on a total basis during the final quarter of 2019.

Online non-food sales increased by 12.8 per cent in December, against a growth of 5.8 per cent in December 2018. Taking November and December together to iron out Black Friday distortions, online non-food sales increased 2.6 per cent, which is lower than the 12 month average of 3.3 per cent.

The non-food online penetration rate increased from 31.2 per cent in December 2018 to 34.5 per cent this December. Over November and December, the online penetration rate was 34.2 per cent, against 32.4 per cent for 2018.

BRC chief executive Helen Dickinson pointed out that 2019 was the first year to show an overall decline in retail sales, something reflected in the number of Company Voluntary Arrangements (CVAs), shop closures and job losses that the industry suffered.

“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,” she continued. “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.”

KPMG’s UK head of retail Paul Martin, commented: “At first glance retailers’ relentlessness paid off in December, with total sales up 1.9 per cent, however, the later timing of Black Friday will have skewed the outcome.”

He concluded: “Consumers clearly favoured logging on to walking in, with online sales up 12.8 per cent in December, but if taking a two-month average, growth online was clearly muted at only 2.6. per cent.”



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