British Retail Consortium: Worst year on record for retail

Last year marked the “worst year on record” for retail sales in the UK, according to new research conducted by the British Retail Consortium (BRC).

British Retail Consortium: Worst year on record for retail

The data found that total sales for 2019 fell by 0.1% compared with 1.2% growth in 2018, marking the worst year on record.

On a total basis, sales increased by 1.9% in December, against a flat 0.0% in December 2018. The 3m and 12m average were -0.4% and -0.1% respectively. 

UK retail sales increased by 1.7% on a like-for-like basis from December 2018, when they had decreased 0.7% from the preceding year. The 3m and 12m averages were -0.9% and -0.5% respectively

Helen Dickinson OBE, chief executive of the BRC, said: “2019 was the worst year on record and the first year to show an overall decline in retail sales. This was also reflected in the CVAs, shop closures and job losses that the industry suffered in 2019.

“Twice the UK faced the prospect of a no-deal Brexit, as well as political instability that concluded in a December General Election - further weakening demand for the festive period. The industry continues to transform in response to the changing technologies and shopping habits. Black Friday overtook Christmas as the biggest shopping week of the year for non-food items. Retailers also faced challenges as consumers became both more cautious and more conscientious as they went about their Christmas shopping.    

“Looking forward, the public’s confidence in Britain’s trade negotiations will have a big impact on spending over the coming year. There are many ongoing challenges for retailers: to drive up productivity, continue to raise wages, improve recyclability of products and cut waste.

“However, this takes resources, so it is essential the new Government makes good on its promise to review, and then reform the broken business rates system which sees retail pay 25% of all business rates, while accounting for 5% of the economy.”

Paul Martin, UK head of retail at KMPG, added: “At first glance retailers’ relentlessness paid off in December, with total sales up 1.9%. However, the later timing of Black Friday will have skewed the outcome. If looking at November and December combined, sales actually declined by 0.9%.

“Consumers clearly favoured logging on to walking in, with online sales up 12.8% in December. However, if taking a two month average, growth online was clearly muted at only 2.6.%.

“Grocery is usually a winner during the festive season, although it is important to highlight that growth has been weakening recently and for many players Christmas did not deliver the results it has in the past.

“All growth will be welcome, although the true performance of Christmas trading is still to be determined. The cost of customer returns must not be overlooked. That’s especially true as online fulfilment already costs retailers a pretty penny. Christmas trading reports will likely be mixed, but those that have truly performed well will have managed margin and costs well over both the Christmas period and beyond.” 

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