The British Retail Consortium (BRC) and KPMG have released the retail figures covering the final five weeks of 2016, from November 27 to December 31, with a late sales surge helping to boost numbers.
UK retail sales increased by 1.0% on a like-for-like basis from December 2015, when they had increased 0.1% from the preceding year, the figures note. On a total basis, sales rose 1.7%, against a 1.0% increase in December 2015.
Over the three-months to December, online sales grew 7.2% while in-store sales declined 1.2% on a total basis, and 1.4% on a like-for-like basis.
British Retail Consortium (BRC) chief executive Helen Dickinson OBE commented: “December is the most important trading period of the year and with sales across 2016 growing more slowly than the previous year, it was all to play for in the final month. Despite the slow start to the Christmas trading period, the week itself was a bumper one and exceeded expectations. It delivered the majority of sales growth for the month, proving even bigger than the Black Friday period – which is the reverse of what we saw the year before.”
She continued: “It was a polarised month as shoppers held out for the Christmas week, which saw sales up around 40% compared with the other weeks of the month. Food sales were the major contributor to total growth, while non-food sales on the other hand were sluggish overall, despite a strong performance by categories driven by gifting items.
“In the end, total growth for 2016 was 1.2%; a marginal increase in pound terms over the previous year but lower than the year-on-year growth achieved in 2015. The challenge for retailers in 2017 will be to create real growth against a backdrop of growing inflationary pressures and persisting economic and political uncertainty. To this end we’ll be continuing our work with Government to encourage policies that help retailers keep prices down for consumers.”
KPMG UK head of retail Paul Martin agreed that the timing of Christmas this year allowed for a late push. “December ended on somewhat of a positive note for retailers, with like-for-like sales rising by 1% on the previous year,” he said. “Retailers were helped by the timing of Christmas, which fell on a Sunday, giving shoppers the chance to use the weekend for a final dash to the shops delivering a last minute boost to sales.
“Christmas stars were home accessories, beauty products and toys which flew off the shelves, encouraged by promotions that in many cases ran throughout the month.
“With major retailers outlining their interim reports in the coming weeks, all eyes will be on whether retailers have thrived, survived or those who are running out of steam in this increasingly challenging environment.”
Looking to 2017, IGD chief executive Joanna Denney-Finch noted that consumers are aware that prices may rise in the coming months. “Looking ahead, eyes are on the possible return of food inflation, with three-quarters (76%) of shoppers anticipating higher prices in 2017,” she said. “A surge in patriotism could be another important factor, with 45% believing it’s more important to buy British-produced food now the UK has voted to leave the EU.”