Food inflation has helped push UK retail sales values up 2.8 per cent year-on-year in November, despite the cold weather depressing overall trade.
British Retail Consortium (BRC) and KPMG’s Retail Sales Monitor for November 2010 showed like-for-like (LFL) sales rising a mere 0.7 per cent compared to 2009, whilst on a three month weighted average they increased by only 0.6 per cent.
Clothes and particularly footwear trade actually benefitted from the cold snap but Director General of the BRC Stephen Robertson warned that once the boost to sales values from annual inflation is accounted for, “underlying volume growth is virtually zero.”
“With the final run-up underway, Christmas performance is delicately poised. Overall, the extreme weather has dramatically undermined sales over the last ten days”, he added.
“Retailers will be hoping disruption eases so that sales lost early in the month are made up over the next couple of weeks and not lost entirely. Booming internet sales alone are unlikely to make up sales shortfalls.”
Non-food non-store sales growth picked up again last month after slowing in October, with a year-on-year increase of 17.6 per cent.
November was the eight month running where growth in retail sales remained low and the three month averages show the weakness of recent trade.
Between September and November food sales rose 4.4 per cent in total and 2.2 per cent LFL, helped by rising prices, but non-food sales declined 0.6 per cent LFL and grew just 1.1 per cent in total.
Helen Dickinson, Head of Retail at KPMG, said: “A slow and uneventful start to Christmas trading, with the gap between food and non-food continuing to widen and non-food in negative LFL territory again.
“Christmas trading is expected to peak later, with online becoming a much larger part of the equation and post-Christmas sales being critical to December’s results – readiness and performance in all will be important to retailer’s fortunes.
“As always, there will be winners and losers – the balance between them is delicately poised and now in the hands of consumers.”