Helen Dickinson, Director General, British Retail Consortium, said: “This is a respectable result overall, in line with our prediction that Christmas trading in 2013 would reflect that while confidence levels were higher than the previous year, this wasn’t always matched by more money in pockets. The last-minute rush also arrived as expected, giving a major boost to sales in the final few days before Christmas after a fairly flat showing mid-month.
“Multichannel is the other big story of the season. This Christmas we’ve seen innovative retailers using click and collect and other approaches to make a virtue of both their website and their physical shops. And that’s something we see growing in importance. Fast deliveries and social media offers have also helped us to plan ahead and cover off our Christmas lists efficiently. In non-food, toys and electricals were key battlegrounds, with customers responding well to competitive offers on festive ‘must-haves’. With budgets still under pressure, many shoppers economised where they could to afford a little luxury here and there, and practical gifts such as bedroom furniture, children’s clothing and kitchen appliances also proved popular.
“Overall, this result meets expectations and draws to a close what has been a year of encouraging but fragile recovery. Retailers will be hoping that a good response to new ranges coupled with a continuing boost from post-Christmas sales events gets 2014 off to a promising start.”
David McCorquodale, Head of Retail, KPMG, said: “December 2013 was all about nerve, margin and multi-channel. After competitive campaigns run by the major retailers, those retailers who held their nerve and provided a seamless service between channels will feel pleased, whilst those who discounted heavily to force sales will count the cost in margin. Overall, the month was slightly positive, particularly in fashion and health and beauty, with traditional gifts playing their part.
“Online sales surged in December representing almost one in five items sold, proving that retail sales growth is being driven by the click of a mouse, rather than the ring of the tills. The food sector remained the most competitive, with slowing inflation, discounting and price wars testing customer loyalty. Today’s savvy consumer is happy to shop around for a bargain.
“The new year will lead retailers to invest more in multichannel capabilities and many will use the quieter first quarter to do just that, or face the prospect of losing out further. For consumers, paying for Christmas will be the first priority of 2014; until wage growth outpaces inflation many households will remain confined to a tight budget for the foreseeable future.”
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: “A last minute surge meant that December’s food and drink sales were up slightly on last year, though below inflation.
“Shoppers had told us they planned to shop around more this Christmas and our latest ShopperVista research shows half of them (50 per cent) visited a food discount store in December. This is an increase from 44 per cent the previous month.
“The good news for food companies is that the improving economy is starting to show through in shopper confidence. Nearly a fifth (18 per cent) expect to be financially better off over the next 12 months, the highest rate since 2011.”
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 these non-store channels. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 10 per cent of total UK retail sales (food and non-food) are achieved via the internet.
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 aggregation of data for the weighted ‘online’ figures has been performed by the BRC and KPMG for periods starting 25 November 2012 and equivalent prior year periods. Prior to that date, the online figures in this monitor refer to the unweighted non-food non store indicator, as published in the BRC-KPMG Retail Sales Monitor until July 2013.
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 2014 Monitor, covering the five weeks 29 December – 1 February, will be released at 00.01am Tuesday 11 February 2014.
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 LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 10,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in more than 156 countries and have more than 152,000 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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IGD makes a difference by providing international market intelligence, supply chain best practice and consumer insight to the food and grocery industry worldwide.
We work with consumers, companies and individuals across the chain to provide authoritative information, insight, thought leadership and leading edge best practice to help companies grow their business and develop their people.
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