Christmas retail sales end well

For the five weeks from 27 November-31 December, UK retail sales increased on a like-for-like basis by one per cent from December 2015 after a strong last week before Christmas, according to the British Retail Consortium/KPMG.

On a total basis, sales rose 1.7 per cent, against a 1.0 per cent increase in December 2015. This is in line with the three-month average of 1.8 per cent but faster than the 12-month average of 1.2 per cent.

Over the three-months to December, Food sales increased 1.1 per cent on a like-for-like basis and 2.4 per cent on a total basis, clearly ahead of the 12-month Total average growth of 1.0 per cent. This is the highest three-month average total growth since September 2013.

Over the three-months to December, Non-Food retail sales in the UK rose 1.1% on a like-for-like basis and 1.3 per cent on a total basis. This is in line with the 12-month Total average growth of 1.3 per cent. This is the lowest Non-Food 12-month average Total growth since October 2012.

December saw mixed results in garden centres, with price rises a concern for 2017.

Over the three-months to December, Online sales grew 7.2 per cent while In-store sales declined 1.2 per cent on a Total basis and 1.4 per cent on a like-for-like basis.

Online sales of Non-Food products in the UK grew 7.2 per cent in December versus a year earlier, when they had increased by 15.1 per cent. This is the first growth below 10 per cent in four months. December’s growth was below the three-month average of 9.5 per cent and the 12-month average of 10.0 per cent.

Over the three months to December, Online sales of Non-Food products in the UK grew 9.5 per cent year-on-year. Over the same period, Total Non-Food sales in the UK grew 1.3 per cent.

In December 2016, Online sales represented 24.3 per cent of total Non-Food sales in the UK, against 22.6 per cent in December 2015. This is the brings the 12-month average penetration rate up to 21.7 per cent.

BRC chief executive Helen Dickinson said: "December is the most important trading period of the year and with sales across 2016 growing more slowly than the previous year, it was all to play for in the final month. Despite the slow start to the Christmas trading period, the week itself was a bumper one and exceeded expectations. It delivered the majority of sales growth for the month, proving even bigger than the Black Friday period- which is the reverse of what we saw the year before.

"It was a polarised month as shoppers held out for the Christmas week, which saw sales up around 40 per cent compared with the other weeks of the month. Food sales were the major contributor to total growth, while non-food sales on the other hand were sluggish overall, despite a strong performance by categories driven by gifting items.

"In the end, total growth for 2016 was 1. 2 per cent; a marginal increase in pound terms over the previous year but lower than the year-on-year growth achieved in 2015. The challenge for retailers in 2017 will be to create real growth against a backdrop of growing inflationary pressures and persisting economic and political uncertainty.  To this end we’ll be continuing our work with Government to encourage policies that help retailers keep prices down for consumers."

KPMG retail head Paul Martin said: "December ended on somewhat of a positive note for retailers, with like-for-like sales rising by 1 per cent on the previous year. Retailers were helped by the timing of Christmas, which fell on a Sunday, giving shoppers the chance to use the weekend for a final dash to the shops delivering a last minute boost to sales.

"Festive feasts were clearly at the forefront of shoppers’ minds, with the 3-month average of like-for-like food sales jumping up by 1.1 per cent: a mean feat considering the stagnation noted the previous month. With price increases looming on the horizon, consumers fully embraced the festive spirit and splashed out on treating themselves.

"Christmas stars were home accessories, beauty products and toys which flew off the shelves, encouraged by promotions that in many cases ran throughout the month.

"With major retailers outlining their interim reports in the coming weeks, all eyes will be on whether retailers have thrived, survived or those who are running out of steam in this increasingly challenging environment." 


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