- UK retail sales values were 2.2% higher on a like-for-like basis from December 2010, when sales had fallen 0.3%, hit by snow. On a total basis, sales were up 4.1%, against a 1.5% increase in December 2010. On both measures and excluding Easter distortions, sales performance was the best since January.
- Food sales growth picked up strongly and non-food also improved, but with sales often promotion-led. Clothing and footwear showed good gains on last December’s weak sales. Homewares improved but big-ticket items and furniture sales remained down on a year ago, hit by consumer caution.
- Non-food non-store (internet, mail-order and phone) sales growth picked up sharply from November’s low. Sales were 18.5% up on a year ago, double November’s gain but similar to the 18.0% in December 2010.
Stephen Robertson, Director General, British Retail Consortium, said:
“A better than hoped-for December closed a relentlessly tough year for retailers, but these figures hinged on a dazzling last pre-Christmas week and were boosted by some major one-off factors. We’re not witnessing any fundamental change in customers' circumstances.
“The comparison is with severe snow disruption a year ago. Discounting was deeper and started earlier and the vital Saturday Christmas-Eve added another big trading day to the final run-up. Post-Christmas offers brought large numbers of shoppers out but that was generally a short-lived hunt for bargains. With discounting driving sales at the expense of margins the key question for retailers is about earnings from those sales.
"A solid December result hasn't rescued a pretty miserable year. Whole-year figures show minimal growth in 2011. For many customers, economic reality has bitten again since the New Year and, with consumer confidence returning to levels last seen during the recession, 2012 is expected to be an equally challenging year."
Helen Dickinson, Head of Retail, KPMG, said:
“December’s figures saw retailers achieve a 2.2 per cent increase in like-for-like sales, albeit against a background of heavy discounting and long opening hours. The month’s figures saw the strongest growth in food sales of the year as people spent on food for the big day. Clothing and footwear also had a spectacular month. Deals helped consumers finally upgrade winter wardrobes as winter commenced in earnest.
“Whilst these results must be viewed in a positive light, it must also be noted that they have come at the end of a year which witnessed declines in most non-food sectors and are against December 2010’s weak results, which saw sales badly affected by poor weather. Sadly no-one expects this level of demand to be indicative of the year ahead.”
Food & Drink – Joanne Denney-Finch, Chief Executive, IGD, said:
“On the face of it, food and drink sales in the lead-up to Christmas were good, indicating shoppers were determined to enjoy their festive fare.
“But several specific factors helped. Christmas fell on a Sunday, the first time this has happened since 2005, allowing consumers to make the most of the six shopping days before the 25th. They also took advantage of more stores opening on Boxing Day and milder weather compared with last year’s wintry conditions.
“The challenging trading environment that characterised 2011 looks set to continue. Success in 2012 will require firms to ensure they adapt quickly to shoppers’ changing habits.”
Non-Food Non-Store* - Stephen Robertson, Director General, British Retail Consortium, said:
"These are buoyant figures. The year's biggest month for spending on non-food goods produced the best online sales growth for over a year.
"This is a return to a stronger growth rate, more typical of those seen in 2010. It’s coming from the underlying structural growth of multi-channel retailing combining with extra Christmas demand, offers such as free delivery, a pre-Christmas start to some sales and the absence of last year's transport disruption.
“This was the highest spending online Christmas yet but online is a relatively small part of overall retailing and the money worries that affected consumers last year have not gone away."
- Ends -
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.
* VAT changes: from 17.5% to 15% on 1st Dec 2008; to 17.5% on 1st Jan 2010; to 20.0% on 4th Jan 2011.
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 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. Therefore like-for-like sales growth will always be lower than total sales growth. 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.
Non-Food Non-Store sales are transactions which take place over the internet, or via mail order or via telesales. Non-Food Non-Store sales growth is the percentage change in the value of all non-food non-store 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 Non-food Non-store sales are still a very small proportion of total UK retail sales. Estimates based on ONS figures show about 8 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 save 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 2012 Monitor, covering the four weeks 1 – 28 January, will be released at 00.01am Tuesday 7th February 2012.
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.
Sponsored and Administered by KPMG
KPMG is a global network of professional services firms providing audit, tax, and advisory services with industry focus. Our aim is to turn knowledge into value for the benefit of our firms’ clients, people, and the capital markets. With nearly 94,000 people worldwide, KPMG member firms provide audit, tax, and advisory services from 717 cities in 148 countries.
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