- UK retail sales values were up 0.3% on a like-for-like basis from December 2011, when they were up 2.2% on the preceding year. On a total basis, sales were up 1.5%, against a 4.1% rise in December 2011.
- The discrepancy between the rate of growth for food and non-food has been narrowing in recent months to the detriment of food.
- Online sales were up 17.8%, the fastest growth since December 2011, when they had risen by 18.5%.
Helen Dickinson, Director General, British Retail Consortium, said: “Against the relentlessly tough economic backdrop and low expectations, these results are not a cause for celebration, but not a disaster either. Total growth for December hasn’t beaten inflation and is only on a par with December 2010, when severe weather put sales volumes on ice for much of the month. Online was the stand-out performer, showing its highest rate of growth this year. Shoppers are increasingly taking advantage of the convenience that online shopping offers at every stage of the customer journey, from comparing prices to reserving and collecting in-store.
“Retailers knew they were facing a challenging Christmas. Some did better than others but they were generally well prepared for shoppers’ limited spending power. After a sluggish start, the final few days leading up to Christmas saw a last-minute sales boost, as many made the most of a full shopping weekend which the calendar didn’t offer in the previous year. Footfall was disappointingly low but it seems that when people did make shopping trips they bought a lot in one go.
“This rather underwhelming result brings a year of minimal sales growth to a close. Retailers will be hoping that a continuing boost from post-Christmas sales events strengthens January’s figures but, unfortunately, there are few signs that their sense of ‘running fast to stand still’ is likely to ease off any time soon.”
David McCorquodale, Head of Retail, KPMG, said: “A flat end to a flat year is perhaps the best way to describe the Christmas trading for 2012. Despite mild, albeit wet, weather for the whole of the last quarter and an extra full weekend immediately prior to Christmas, the final quarter saw total sales rise only 1.5 per cent on the previous year and like-for-likes rise by only 0.2 per cent - both rises lower than inflation.
“Retailers this year were perhaps better prepared for a sluggish quarter and held less stock throughout. The stand-off between retailers and consumers looking for bargains and discounts continued throughout December and, while some retailers will report record Christmas sales, most will breathe a sigh of relief because it could have been much worse. Footfall rose in the last week of the year as consumers sought out some bargains but the year’s trading is made in the six weeks leading up to Christmas, not the six days after it.
“January will be a tough month for retailers as consumers face up to their credit card bills after Christmas and it’s likely 2013 will bring more of the same challenges. While consumer confidence remains low, shoppers will tighten their belts and rein in their spending, making life difficult for the average UK retailer. There will be no boom and it’s likely more than a few will go bust.”
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: “The focus on eating and drinking over the festive period helped retain the week leading up to Christmas as the biggest of the year, in terms of food and grocery sales.
“But taken as a whole, December’s performance was relatively flat. Yet again shoppers left it even later than the previous year to do their Christmas grocery shopping, with a strong final two weeks off-setting a slow start to the month.
“The challenging conditions look set to continue into this year. Our ShopperVista research shows over half of shoppers (51 per cent) are aiming to save money on their grocery shopping over the next six months. This figure rises to 67 per cent of families with teenagers.”
The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.
Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis.
Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers include distance sales as a component of total sales.
'Like-for-like' sales growth (LFL) is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Many retailers include distance sales as a component of like-for-like comparable sales.
The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.
Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by this non-store channel. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 9 per cent of total UK retail sales (food and non-food) are achieved via the non-store channel.
The responses provided by retailers within each sales category are weighted (based on ONS weightings) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.
As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD's Market Track Scheme.
In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and the same for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000. The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.
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The January 2013 Monitor, covering the four weeks 30 December – 26 January, will be released at 00.01am Tuesday 5 February 2013.
The data is collected and collated for the BRC by KPMG.
The British Retail Consortium (BRC) is the UK's leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based.
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
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