Lit­tle fes­tive cheer for re­tail on high street

Shops have worst Christ­mas since the fi­nan­cial crash

Yorkshire Post - Business - - FRONT PAGE - Ros Snow­don CITY ED­I­TOR @RosSnow­donYPN

Re­tail­ers have seen their worst Christ­mas since the fi­nan­cial cri­sis in 2008, ac­cord­ing to the lat­est BRC-KPMG Re­tail Sales Mon­i­tor.

UK re­tail sales fell by 0.7 per cent on a like-for-like ba­sis in De­cem­ber. The BRC said squeezed con­sumers chose not to splash out this Christ­mas with re­tail sales growth stalling for the first time in 28 months.

It said the worst De­cem­ber sales per­for­mance in 10 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”.

The re­port said re­tail­ers’ price cuts had not been enough to en­cour­age shop­pers.

BRC chief ex­ec­u­tive He­len Dick­in­son said the re­tail land­scape is “chang­ing dra­mat­i­cally” in the UK, while the trad­ing en­vi­ron­ment re­mains tough.

“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,” she said.

“Re­tail makes up 5 per cent of the econ­omy, yet pays 10 per cent of all busi­ness taxes and 25 per cent of all busi­ness rates. This is nei­ther fair nor sus­tain­able. The Gov­ern­ment should ur­gently look into re­form­ing the bro­ken busi­ness rates sys­tem and cham­pion the fu­ture of re­tail in the UK.”

The BRC said the con­trast in per­for­mance be­tween the high street and on­line re­mained ev­i­dent in De­cem­ber

Paul Martin, UK head of re­tail at KPMG, said: “Re­tail­ers ex­pe­ri­enced lit­tle fes­tive cheer this year, with to­tal sales in De­cem­ber de­liv­er­ing zero growth on last year.

“This comes de­spite some re­tail­ers des­per­ately at­tempt­ing to gen­er­ate sales through slashed pric­ing, which has seem­ingly not been enough to en­cour­age shop­pers.”

Mr Martin said growth in food sales pro­vided a glim­mer of hope, be­ing one of the few cat­e­gories to re­port an uptick.

“How­ever, the con­tin­ued con­trast in per­for­mance be­tween the high street and on­line re­mained ev­i­dent in De­cem­ber – al­beit 2018 did also see a con­tin­ued slow­down in on­line re­tail sales,” he added.

He said the first months of 2019 will un­likely hold much im­prove­ment.

“As many re­tail­ers re­port their fes­tive trad­ing per­for­mance, the list of win­ners and losers will be­come clear, but win­ning means more than just im­prov­ing sales. Re­tail­ers have to pro­tect their mar­gins in or­der to de­liver a prof­itable fes­tive sea­son,” he added.

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