UK retail sales: Christmas brings little cheer to retailers

Kasmira Jefford
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London's Department Stores And Their Christmas Windows
On a three-month basis, non-food sales were at their weakest since January 2013 (Source: Getty)

Christmas brought little cheer to UK retailers in December as hopes of a boost to sales from higher consumer confidence fell flat.

The British Retail Consortium (BRC) and KPMG’s latest monthly index shows like-for-like retail sales rose by 0.1 per cent from December 2014, when they had decreased 0.4 per cent.

Total sales were up one per cent, against a one per cent rise in December 2014. However, excluding shop price deflation, total growth was three per cent.

On a three-month basis, total non-food sales were up 1.5 per cent, which was the weakest growth since January 2013, as the mild weather weighed on clothing sales.

“Despite a number of positive economic indicators, retail sales over Christmas were relatively flat with more products on discount and the depth of discounting also deeper,” KPMG’s head of retail, David McCorquodale said.

“Although retailers tried to tame Black Friday 2015, it still had a significant impact on the shape of sales over the festive season, spreading spend over six weeks rather than two. Fashion sales were the losers in December as mild weather deferred the need and wet weather deferred the inclination to try and buy a new winter outfit.

A number of high street retailers including Next and Marks & Spencer have already warned of tough trading conditions on the high street this winter, while Sports Direct issued a profit warning last week.

Meanwhile the increasing importance of of Black Friday and the later timing of Christmas this year resulted in more people shopping online at the expense of the high street, with non-food online sales up by 15.1 per cent,.

“With price deflation and offers aplenty, the current retail climate is great news for consumers, however retailers are not benefiting from the improved economic climate in the same way that other sectors have done,” BRC chief executive Helen Dickinson, said.

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