Festive period fails to boost retail sales, BRC finds

Total retail sales in the UK rose by only 1.7% in December, against a growth of 6.9% the prior year, as Christmas failed to “make amends” for what was a challenging year in retail. December’s growth was below the three-month average growth of 2.3%, and below the 12-month average growth of 3.6%. Food sales over the three months to December rose by 6.8% on a total basis, which was below the 12-month average growth of 8.1%. For the month of December, food was in growth year-on-year, however. Meanwhile, non-food sales were down by 1.5% over the three-months to December. This was steeper than the 12-month average decline of 0.1%, and for December, non-food was in decline year-on-year. Over the three months to December, in-store non-food sales fell by 1.3% on a total basis since December 2022. This was below the 12-month average growth of 1.6%. In addition, online non-food sales decreased by 0.8% in December, against a decline of 3% in December 2022. This was shallower than the three-month decline of 1.7% and the 12-month decline of 2.8%. Helen Dickinson OBE, CEO of the BRC said: “The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending. The post-Christmas sales were unsuccessful in enticing spend in areas such as furniture and homeware, with households remaining cautious about making larger purchases. “Sales saw a slight uptick in the week leading up to Christmas as consumers scrambled to purchase last minute gifts, particularly online, due to the wet weather. In gifting, beauty products were the standout performer, and toys and gaming also sold well.” She added: “2024 looks to be another challenging year for retailers and their customers, and spending will continue to be constrained by high living costs. Retailers will also have to juggle various cost pressures, including the rise to business rates this April. “This will be compounded by other emerging issues, such as the disruption to shipments from the Far East via the Red Sea. Political parties must consider this backdrop when they set out their plans for retail in manifestos so they can help support the industry to grow, invest, and serve customers.” Paul Martin, UK head of Retail, KPMG, said: “Despite falls in inflation, an upcoming cut in national insurance rates, and some consumers having more money in their pockets this Christmas than last, the constant drip of economic challenges they’ve faced over the last two years has finally come home to roost. “As we start a new year, cautious consumers are battening down the hatches and retailers can expect to see significant downward pressures on demand in the opening months of this year, which will ease off by Spring if the economic conditions continue to improve and confidence slowly returns.”