High street suffers flat festive sales

Shoppers may have been out in force before Christmas but overall sales figures were sluggish. Picture: Getty Images
Shoppers may have been out in force before Christmas but overall sales figures were sluggish. Picture: Getty Images
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shoppers failed to give the high street a much-needed Christmas lift according to new figures showing sales barely grew in December and raising concerns that more retailers will go bust as the tough trading conditions continue.

Rounding off a difficult year which saw the likes of Comet, JJB Sports and Peacocks call in the administrators, like-for-like sales rose by just 0.3 per cent in December, well below the 2.2 per cent growth seen during the same month a year earlier.

And the coming months are likely to heap further pressure on retailers as people face up to their post-Christmas credit card bills, today’s report from the British Retail Consortium (BRC) and KPMG said.

Helen Dickinson, director-general of the BRC, said: “Against the relentlessly tough economic backdrop and low expectations, these results are not a cause for celebration, but not a disaster either.”

KPMG’s head of retail, David McCorquodale, said many stores would be relieved that December’s figures were not even weaker, as they had been prepared for a “sluggish” end to the year, but he warned of further casualties on Britain’s beleaguered high streets.

McCorquodale said: “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.”

He added: “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.”

Today’s report shows that cash-strapped consumers took to the internet to seek out bargains, helping to grow online sales by 17.8 per cent – the fastest pace since December 2011.

Dickinson said: “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.”

Department store chain John Lewis has been one notable winner in the race to secure customers in its branches and over the internet, with the popularity of its “click and collect” service helping to grow online sales by 21.7 per cent in the week to 29 December.

Michael Hewson, senior market analyst at CMC Markets, said the 
recent bad publicity surrounding Amazon’s tax situation in the UK had provided a boost for employee-owned John Lewis and other rivals.

He said: “Initial indications from John Lewis last week saw their online sales jump sharply in the wake of the row surrounding Amazon’s tax affairs. Next has also reported a fairly upbeat set of post-Christmas trading numbers, with online sales continuing to account for a good chunk of revenue.”

Last week’s update from fashion and furnishings retailer Next showed sales at its Directory home shopping business between 1 November and 24 December were up 11.2 per cent compared with the same period a year earlier, compared with growth of just 0.8 per cent at its stores.

Howard Archer, chief UK and European economist at IHS Global Insight, said: “The pressure was on retailers, as hard data from the Office for National Statistics show retail sales volumes were only flat month-on-month in November after falling by 0.7 per cent in October.”