UK: Clothing "performed well" amid challenging December
UK retail sales saw only marginal gains in December, with results little changed from two years ago when severe storms deterred shoppers according to figures released today (8 January) - although clothing "performed well."
Data from the British Retail Consortium (BRC) showed December sales increased 1.5% over the month, rising 0.3% on a like-for-like basis.
"Against the relentlessly tough economic backdrop and low expectations, these results are not a cause for celebration, but not a disaster either," said director general Helen Dickinson.
"Total growth for December hasn't beaten inflation and is only on a par with December 2010, when severe weather put sales volumes on ice for much of the month. Online was the stand-out performer, showing its highest rate of growth this year.
"Shoppers are increasingly taking advantage of the convenience that online shopping offers at every stage of the customer journey, from comparing prices to reserving and collecting in-store.
"Retailers knew they were facing a challenging Christmas. Some did better than others but they were generally well prepared for shoppers' limited spending power.
"After a sluggish start, the final few days leading up to Christmas saw a last-minute sales boost, as many made the most of a full shopping weekend which the calendar didn't offer in the previous year. Footfall was disappointingly low but it seems that when people did make shopping trips they bought a lot in one go."
Non-food sales increased 0.1% over the three months to end-December, rising 0.7% on a total basis.
Clothing had a "decent end of the year", which BRC senior analyst Anne Alexandre attributed to slightly colder weather, which would have driven the sale of outerwear and jumpers. Nightwear and onesies also performed well.
However, she added that there were reports some 69% of retailers were running sales or advertising promtions in shop windows two weeks before Christmas with discounts up to 70%.
"Perhaps as a result, clothing performed well just before Christmas and continued to attract shoppers when the sales started. Despite the promotional activity, retailers had generally less stock to clear and therefore sold more at full price than last year," said Alexandre.
Footwear remained the best performer for the month, despite volumes and footfall declining on December last year.
"Promotional sales started later than last year. The product mix was also favourable as there was a lot more interest in buying boots than a year ago. Formal footwear was generally reported as a weak segment," added Alexandre.
Dickinson is not optimistic of any immediate improvement in retailers' performance.
"This rather underwhelming result brings a year of minimal sales growth to a close. Retailers will be hoping that a continuing boost from post-Christmas sales events strengthens January's figures but, unfortunately, there are few signs that their sense of ‘running fast to stand still' is likely to ease off any time soon," she said.
Meanwhile, Jon Copestake, retail analyst at The Economist Intelligence Unit, added: "Despite a late surge of shoppers during the two "Panic Saturdays" before Christmas, weak trading in the early part of the festive shopping period always meant that December sales would threaten to disappoint.
"Even as sales rose later in the month profitability was eroded by early sales for some retailers.
"The tepid performance comes as little surprise in a year where budgets and consumer confidence have been constrained by austerity measures and recession. The high street may hope for a brighter future, but it seems likely that the challenges faced last year will persist in 2013."