Little festive cheer for retail on high street
Shops have worst Christmas since the financial crash
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.