UK high street ends dire year on back foot - BRC

The British high street endured its worst year on record in 2019, the British Retail Consortium said on Thursday, as political turmoil weighed on consumer confidence and dented festive demand.

According to the BRC-KPMG retail sales monitor, total sales increased by 1.9% in December, one of the most important months of the year for retailers, against a flat performance of 0.0% a year earlier.

On a like-for-like basis, which strips out the impact of new openings, UK retail sales rose 1.7% compared to a 0.7% fall 12 months previously.

However, the figures have been distorted by the timing of Black Friday. The December retail sales monitor covers the five weeks from 24 November to 28 December, which included Black Friday. In 2018, however, Black Friday fell in the November monitor period.

The headline year-on-year change over November and December together saw sales fall 0.9%, which was worse than both the three-month and 12-month averages, which recorded declines of 0.4% and 0.1% respectively.

Paul Martin, UK head of retail at KPMG, said: "At first glance, retailers’ relentlessness paid off in December, with total sales up 1.9%. However, the later timing of Black Friday will have skewed the outcome.

"Christmas trading reports will likely be mixed, but those that have truly performed well will have managed margin and costs well over both the Christmas period and beyond."

Helen Dickinson, chief executive of the BRC, said: "2019 was the worst year on record, and the first year to show an overall decline in retail sales. This was also reflected in the CVAs, shop closures and job losses that the industry suffered in 2019.

"Twice the UK faced the prospect of a no-deal Brexit, as well as political instability that concluded in December in a general election, further weakening demand for the festive period."

Over the three months to December, in-store sales of non-food items declined 3.5% and by 3.8% on a like-for-like basis, lower than the 12-month average of 3.1%.

During the same period, food sales were flat but increased by 0.75% on a total basis. The 12-month total average was for growth of 1.4%.

Martin noted: "Grocery is usually a winner during the festive season, although it is important to highlight that growth has been weakening recently and for many players Christmas did not deliver the results it has in the past."

Susan Barratt, chief executive of IGD, said: "Food and grocery sales ended 2019 on a downbeat note. Despite the influence of some inflation across the market, shopper spending was not as expected for such a key sales period. As a result, while the value of spending wasn’t down, growth was negligible and volumes declined – a rarity of Christmas in recent times."

So far, fashion retailer Next has reported bumper trading over the crucial festive period, but grocers J Sainsbury’s and Wm Morrison saw sales fall. Sainsbury’s, which reported a 0.7% dip in like-for-like sales in the 15 weeks to 4 January, blamed weak demand for toys. Morrisons saw underlying sales slide 1.7% in the 22 weeks to January 5.

The BRC said online sales rose by 12.8% in December but on a two-month average, which strips out the impact of the Black Friday timings, they increased by a more modest 2.6%.