BRC-KPMG: Xmas trading ‘respectable’ thanks to late rush

UK retail sales were up 0.4% on a like-for-like basis from December 2012, when they had increased 0.3% on the preceding year, according to the latest data from the BRC-KPMG Retail Sales Monitor.

On a total basis, sales were up 1.8%, against a 1.5% increase in December 2012 – the lowest growth of 2013. The three-month average total growth was 2.2% against 2.8% for the 12-month period, confirming the recent slowdown in sales and consumer confidence.

Online sales of non-food products in the UK grew 19.2% in December versus a year earlier – the highest growth in four years.

Helen Dickinson, Director General of the BRC (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 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.

“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 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.”

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