Figures released by the Office for National Statistics (ONS) revealed year-on-year growth for the end of year period for UK retailers, while highlighting November’s increased importance and significant year-on-year online growth.
Estimates of the quantity bought in retail sales increased by 4.3% compared with December 2015, but fell by 1.9% compared with November 2016, with the largest contribution to the month-on-month fall coming from non-food stores.
Average store prices increased by 0.9% on the year and for all retailing, excluding fuel prices, increased by 0.1%, which is the first increase since June 2014.
Online sales increased year-on-year by 21.3%, but fell on the month by 5.3%, accounting for approximately 15% of all retail spending.
ONS senior statistician Kate Davies commented: “Retailers saw a strong end to 2016 with sales in the final quarter up 5.6% on the same period last year, although the amount bought fell between November and December once the effects of Christmas are removed. There were some notably strong figures from smaller retailers, in particular butchers, who reported a significant boost in sales in the run up to Christmas.”
Among those to comment on the figures was Salmon head of retail and marketing Patrick Munden.
“The ONS figures not only continue the trend of ecommerce dominating the retail space but show that shoppers are shifting away from spending during the Christmas period,” he said. “Online sales (excluding fuel) during December increased year-on-year by 21.3%, but fell on the month by 5.3%. This falls in line with data from Salmon showing that Christmas peak is enduring a gradual fall, with Black Friday taking over the mantle as the most important retailing event of the year as UK shoppers grab most of their bargains in November and not December. Retailers saw 28% more online orders across the Black Friday period (November 22 to 28) than the peak festive period (December 21 to 27).”
He continued: “Generally, it was a strong end to the year for vendors that embraced ecommerce and strengthened their multichannel offering. Consumers are now taking to online services in search of a convenient, quick and easy-to use service. 2016 was the year that Black Friday grew into a phenomenon, displacing the more common Christmas peak that retailers usually see. Mobile was crucial to this, with the majority of online orders during Black Friday (51%) and Christmas (60%) reaching record levels. Mobile is now the biggest player in the retail space and, with consumers looking to secure greater luxury in their daily shop, vendors that do not embrace this shift will flounder in the ultra-competitive retail market.”
Fujitsu UK and Ireland director for retail and hospitality Heather Barson commented: “December’s ONS figures, although up from last year, demonstrate a clear shift in consumer shopping behaviour and to a degree solidifies November as the prime Christmas shopping period. With December sales down 1.9% compared to November, it suggests savvy consumers took advantage of the offers available during Black Friday and the weeks that surrounded it, doing the majority of their Christmas shopping then.
“What’s interesting about these results is that they highlight how shoppers’ online habits have evolved over the past year, with online sales up 21.3% compared to last December; a clear indicator of consumers becoming ever more at home with using digital channels to shop.
“Looking at the year ahead, retailers need to embrace the growing popularity of online shopping and view it as an opportunity to bring bricks and mortar stores into the digital era. Our recent research demonstrated that 86% of UK retailers believe digital disruption will fundamentally change their sector by 2021, and it’s those that embrace digital into their business quickly that will be able to provide the convenience of online to customers, and better respond to their ever changing needs. Only through this will UK retailers be able to differentiate themselves in an increasingly competitive market.”