“2019 worst year on record for retail” says BRC

Last year (2019) was the worst recorded year for retail sales, with a decrease of 0.1 per cent in total sales, compared with 1.2 per cent growth in 2018, according to the latest Retail Sales Monitor by the British Retail Consortium (BRC) and KPMG carried out in December.

Helen Dickinson OBE, Chief Executive at BRC attributed the poor performance to political instability, ending in the general election which weakened demand further, as well as the prospect of a no-deal Brexit, a scenario which the UK faced twice last year.

The effect of the decline in sales “was also reflected in the Company Voluntary Agreements (CVAs), shop closures and job losses that the industry suffered in 2019,” she said.

Although total sales increased by 1.9 per cent in December 2019, against a flat 0.0 per cent in December 2018, the three-month and 12-month averages were down 0.4 per cent and 0.1 per cent respectively. Total sales declined 0.9 per cent, compared with the same period in 2018.

December figures were positively distorted by the late timing of Black Friday, which occurred in December 2019 as opposed to November in 2018, so covering the five weeks from 24 November to 28 December 2019, the researchers calculated two-month average figures in order to correct for this distorting effect and, therefore, represent a clear picture of the festive period overall, the BRC said.

Over the three months to December, in-store sales of Non-Food items also declined 3.5 per cent on a Total- basis and 3.8 per cent on a like-for-like basis. This is worse than the 12-month Total average decline of 3.1 per cent, the report stated.

Across the three-months to December, Non-Food retail sales in the UK decreased by 1.6 per cent on a like-for-like and 1.4 per cent on a Total basis. This is below the 12-month Total average decrease of 1.3 per cent. For the month of December, Non-Food was in growth year-on-year but positively distorted by the timing of Black Friday.

ONLINE

Online the picture was better with Non-Food sales up by 12.8 per cent in December, versus growth of 5.8 per cent in December 2018. But taking November and December into consideration, online Non-Food sales increased just 2.6 per cent – lower than the 12-month average of 3.3 per cent.

Non-Food online penetration rate increased from 31.2 per cent in December 2018 to 34.5 per cent this December. Over the two months of November and December, the Online penetration rate was 34.2 per cent for 2019, against 32.4 per cent for 2018, a 1.8 percentage points increase.

MOVING FORWARD

Ms Dickinson added: “The industry continues to transform in response to the changing technologies and shopping habits. Black Friday overtook Christmas as the biggest shopping week of the year for non-food items. Retailers also faced challenges as consumers became both more cautious and more conscientious as they went about their Christmas shopping.

“Looking forward, the public’s confidence in Britain’s trade negotiations will have a big impact on spending over the coming year. There are many ongoing challenges for retailers: to drive up productivity, continue to raise wages, improve recyclability of products and cut waste. However, this takes resources, so it is essential the new Government makes good on its promise to review, and then reform the broken business rates system which sees retail pay 25 per cent of all business rates, while accounting for five per cent of the economy.”