Retail endures worst Christmas trading since 2008

December retail sales
// Total UK retail sales growth flat at 0%
// Like-for-likes sales declines 0.6%
// Figures mark the worst Christmas trading period for UK retail since 2008

Sales growth in UK retail flatlined in December, marking the worst Christmas trading period for the sector since 2008.

According to the latest BRC-KPMG Retail Sales Monitor, total sales for the period between November 25 and December 29 were a flat at zero per cent.

This compares to an increase of 1.4 per cent in December 2017, and is the lowest growth of the year since April, excluding Easter distortions.

In addition, it was below the three-month and 12-month averages of 0.5 per cent and 1.2 per cent respectively, and marked the worst December performance in a decade.

On a like-for-like basis, UK retail sales decreased by 0.7 per cent when compared to December 2017, when they had increased 0.6 per cent from the preceding year.

The BRC and KPMG’s report said retailers’ price cuts had seemingly not been enough to encourage shoppers.

“Squeezed consumers chose not to splash out this Christmas, with retail sales growth stalling for the first time in 28 months,” BRC chief executive Helen Dickinson said.

“The worst December sales performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger.”

She added that the retail sector was “changing dramatically” in the UK, and that the trading environment remained tough.

“Retailers are facing up to this challenge but are having to wrestle with mounting costs from a succession of government policies – from the apprenticeship levy, to higher wage costs, to rising business rates,” she said.

KPMG head of UK retail Paul Martin said: “Retailers experienced little festive cheer this year, with total sales in December delivering zero growth on last year.

“This comes despite some retailers desperately attempting to generate sales through slashed pricing, which has seemingly not been enough to encourage shoppers.

“Growth in food did provide a glimmer of hope, being among the few categories to notice an uptick.

“However, the continued contrast in performance between the high street and online remained evident in December – albeit 2018 did also see a continued slowdown in online retail sales.”

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