Retail sales in the UK showed no year-on-year growth at all over December, in what has been labelled the worst Christmas for the British high street since 2008.
According to a report by the British Retail Consortium (BRC) and auditing firm KPMG, total retail sales were flat during the festive season, while like-for-like sales fell by 0.7% from December 2017, as shoppers “reined in spending and shifted to budget retailers”, The Independent reports.
BRC chief executive Helen Dickinson said that despite considerable price cuts in stores, sales figures show that consumers “chose not to splash out this Christmas”.
“The worst December sales performance in ten years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger,” she said.
“Retailers are facing up to this challenge but are having to wrestle with mounting costs from a succession of government policies – from the apprenticeship levy, to higher wage costs, to rising business rates.”
There was some good news, however. Paul Martin, UK head of retail at KPMG, said that while retailers experienced “little festive cheer this year”, the food sector ”did provide a glimmer of hope, being among the few categories to notice an uptick” in spending.
But in a continuation of the doom and gloom, a separate study published by Barclaycard found that consumer spending grew by just 1.8% year-on-year in December – the lowest rate of growth seen since March 2016, the BBC reports.
Barclaycard director Esme Harwood said this modest growth “represents a decline in real terms”, adding that consumers “remain cautious amidst ongoing economic uncertainty”.
High-street retailers are still reeling from a disastrous 2018. A total of 2,692 shops disappeared from Britain’s top 500 high streets in the first six months of the year – a rate of around 14 a day.
Richard Lim, of consultancy Retail Economics, said the BRC’s figures “are worse than we’d feared and hammer home the message that all is not well on our high streets”, reports HuffPost.
Lim blamed “the ongoing shift towards online shopping” and an “extraordinary level of discounting in the run-up to Christmas” for eroding profit margins over the traditionally lucrative festive period.
“Inevitably, this will have left many retailers in a more precarious financial situation heading into 2019,” he said.