BRC-KPMG: December's retail sales saw a strong finish

The BRC and KPMG have reported on the UK's retail sector during December 2016, covering the five weeks 27 November – 31 December 2016.

• UK retail sales increased by 1.0% on a like-for-like basis from December 2015, when they had increased 0.1% from the preceding year.
• On a total basis, sales rose 1.7%, against a 1.0% increase in December 2015. This is in line with the 3-month average of 1.8% but faster than the 12-month average of 1.2%.
• Over the three-months to December, Food sales increased 1.1% on a like-for-like basis and 2.4% on a total basis, clearly ahead of the 12-month Total average growth of 1.0%. This is the highest 3-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% on a total basis. This is in line with the 12-month Total average growth of 1.3%. This is the lowest Non-Food 12-month average Total growth since October 2012.
• Over the three-months to December, Online sales grew 7.2% while In-store sales declined 1.2% on a Total basis and 1.4% on a like-for-like basis

HELEN DICKINSON OBE, CHIEF EXECUTIVE, BRITISH RETAIL CONSORTIUM
“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.”

PAUL MARTIN, UK HEAD OF RETAIL, KPMG
“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.”

JOANNE DENNEY-FINCH, CHIEF EXECUTIVE, IGD
“The grocery year ended on a high, with a substantial sales increase versus December 2015. Shoppers took their Christmas food and drink spending even closer to the wire than usual, with a record-breaking week leading up to the 25th. This sealed a strong second half of the year for food retailers.

“Looking ahead, eyes are on the possible return of food inflation, with three-quarters (76 per cent) of shoppers anticipating higher prices in 2017. A surge in patriotism could be another important factor, with 45 per cent believing it’s more important to buy British-produced food now the UK has voted to leave the EU.”

Source : British Retail Consortium 
www.brc.org 

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