Christmas trading respectable thanks to a late rush

Published:  03 February, 2014

According to the latest Retail Sales Monitor from KPMG and the British Retail Consortium, UK retail sales were up 0.4 per cent on a like-for-like basis from December 2012, when they had increased 0.3 per cent on the preceding year. On a total basis, sales were up 1.8 per cent, against a 1.5 per cent increase in December 2012, the lowest growth of 2013.

The three-month average total growth was 2.2 per cent against 2.8 per cent for the 12-month period, confirming the recent slowdown in sales and consumer confidence.

Health & beauty and clothing had a strong finish to the year, while other non-food was the strongest contributor to sales growth in December and the fastest-growing category in 2013.

Online sales of non-food products in the UK grew 19.2 per cent in December versus a year earlier, the highest growth in four years. The online penetration rate achieved 18.6 per cent in December.

BRC director general Helen Dickinson said: “This is a respectable result overall, in line with our prediction that Christmas trading in 2013 would reflect that while confidence levels were higher than the previous year, this wasn’t always matched by more money in pockets. The last-minute rush also arrived as expected, giving a major boost to sales in the final few days before Christmas after a fairly flat showing mid-month.

“Multichannel is the other big story of the season. This Christmas we’ve seen innovative retailers using click and collect and other approaches to make a virtue of both their website and their physical shops. And that’s something we see growing in importance. Fast deliveries and social media offers have also helped us to plan ahead and cover off our Christmas lists efficiently.

“In non-food, toys and electricals were key battlegrounds, with customers responding well to competitive offers on festive ‘must-haves’. With budgets still under pressure, many shoppers economised where they could to afford a little luxury here and there, and practical gifts such as bedroom furniture, children’s clothing and kitchen appliances also proved popular.

“Overall, this result meets expectations and draws to a close what has been a year of encouraging but fragile recovery. Retailers will be hoping that a good response to new ranges coupled with a continuing boost from post-Christmas sales events gets 2014 off to a promising start.”

And David McCorquodale, head of retail at KPMG, said: “December 2013 was all about nerve, margin and multi-channel. After competitive campaigns run by the major retailers, those retailers who held their nerve and provided a seamless service between channels will feel pleased, whilst those who discounted heavily to force sales will count the cost in margin.

“Overall, the month was slightly positive, particularly in fashion and health & beauty, with traditional gifts playing their part.

“Online sales surged in December representing almost one in five items sold, proving that retail sales growth is being driven by the click of a mouse, rather than the ring of the tills. The food sector remained the most competitive, with slowing inflation, discounting and price wars testing customer loyalty. Today’s savvy consumer is happy to shop around for a bargain.

“The new year will lead retailers to invest more in multichannel capabilities and many will use the quieter first quarter to do just that, or face the prospect of losing out further.

“For consumers, paying for Christmas will be the first priority of 2014; until wage growth outpaces inflation many households will remain confined to a tight budget for the foreseeable future.”

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