Retail like for likes fall 0.3% in December

BRC-KPMG retail sales monitor for December 2010 says that snow made a tough Christmas worse.

UK retail sales values were down 0.3% on a like-for-like basis from December 2009, when sales had risen 4.2%. On a total basis, sales were up 1.5% against a 6.0% increase in December 2009.

Snow disrupted sales patterns and meant lost trade for some. Food sales growth slowed a little. Non-food had a much tougher time. In particular, larger purchases were hit by fears about jobs and incomes.

Non-food non-store (internet, mail-order and phone) sales growth edged up only marginally in December after picking up in November. Sales were 18.0% higher than a year ago, against a 26.5% increase in December 2009.

Stephen Robertson, Director General, British Retail Consortium, said,“The unusually early winter weather made a difficult Christmas worse. With mounting concerns about the impact of spending cuts and the wider economy, sales growth has been weak since last summer. December was always likely to be similarly unspectacular but the snow and ice dealt an extra blow to business for many retailers.

"Catch-up shopping gave a big boost to the week just before Christmas and the post-Christmas clearances were strong for non-food retailing but neither was enough to replace every sale lost earlier in the month. Generally, people did spend on food for the big day. They had a celebration, but a combination of weather and worries led them to cut back on presents. With the big day over, there was a rush to the shops for discounted sales items but customers hit the brakes on buying food and drink.

"This is no return to the dire picture two years ago, but the message for the Chancellor is: concentrate on delivering growth and leave any new burdens out of your March Budget."

Helen Dickinson, Head of Retail, KPMG, said,"December is the biggest month of the year with volumes 20-30 per cent higher than other month. Very disappointingly, without the impact of the arctic weather the results would have been noticeably better. The gap between food and non-food grew as the non-food sectors saw a decline in the value of sales against Christmas of 2009 whereas food sales growth continued at close to the existing run rate. The contrast between pre- and post- Christmas was stark for both food and non-food retailers. Food sales dropped off after a good pre-Christmas week. In contrast, non-food improved as shoppers headed out in the final week to take advantage of clearance bargains in advance of the VAT rise, so releasing a level of pent-up demand. However, this was not enough to make good the pre-Christmas shortfall and was at lower margin due to the commencement of the sales. 2011 is set to be a challenging year."

Source : The Retail Bulletin