The retail sector has seen its worst Christmas performance in 10 years, despite a number of businesses reporting positive trading for the period.
According to the British Retail Consortium (BRC), over the festive period retail sales growth was at 0% for the first time in 28 months as “squeezed customers” decided not to spend.
The total three-month average year-on-year sales for non-food items dropped by 0.4% while food items fared slightly better with 1.8% change. The total three-month average year-on-year difference showed an uptick of 0.5%. Like-for-like sales for the period fell by 0.7%.
Helen Dickinson OBE, chief executive, BRC, said: “The worst December sales performance in ten 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.
“Retail makes up 5% of the economy, yet pays 10% of all business taxes and 25% of all business rates. This is neither fair nor sustainable. The government should urgently look into reforming the broken business rates system and champion the future of retail in the UK.”
Paul Martin, UK head of retail, KPMG, added: “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.”
He added: “The first months of 2019 will unlikely hold much improvement. As many retailers report their festive trading performance, the list of winners and losers will become clear, but winning means more than just improving sales. Retailers have to protect their margins in order to deliver a profitable festive season.”