December is the worst in 14 years for UK retailers
Jan 13 2009 by Iain Laing, The Journal
RETAILERS suffered their worst December on record as consumers reined in spending and put off Christmas shopping until the last minute, according to a new survey.
Like-for-like sales slumped 3.3% last month compared with December 2007, according to the British Retail Consortium KPMG Retail Sales Monitor. The performance is the poorest for December since the survey began 14 years ago and the BRC said, barring Easter distortions, it was also the worst of any month in the poll’s history.
The BRC described the sales figures as “truly dreadful” and said retailers had been hit by shoppers leaving their Christmas shopping until the last minute and waiting for early discounting.
Food and drink was one of the few sectors to see an increase in sales during the five week period from November 30 to January 3.
But even food retailers saw the weakest sales growth since March and the BRC said sales were also inflated by higher prices.
Stephen Robertson, director general of the BRC, said: “These are truly dreadful numbers. Some retailers were more successful than others and the second half of December was better than the first. But overall the food sector was almost the only one to show growth.”
“Non-food retailers had a torrid December despite a blizzard of promotions and deals, which would have hit margins. Many hard-pressed customers couldn’t be seduced into spending,” he added.
The December fall brought the year-on-year comparable sales decline in the fourth quarter of 2008 to 2.7%.
Footwear was the only other sector to show sales growth over the festive period, although the BRC said this largely reflected heavy discounting.
The rise in online shopping boosted non-food, non-store sales by 30% on a year ago.
However, clothing, furniture and “big ticket” homewares fell further below year-earlier levels in December.
Food retailers have been among the few to weather the spending downturn over Christmas, with Waitrose, the Co-operative Group and Sainsbury’s recently reporting robust figures for the period.
Food shops have noted strong demand for value ranges, while some surveyed by the BRC said they had seen a shift to basic ingredients as cost-conscious shoppers looked to save money by cooking from scratch.
KPMG’s head of retail Helen Dickinson warned the December figures did not bode well for the year ahead.
