Retailers have suffered their worst Christmas in a decade as consumers tighten their belts amid uncertainty over Brexit, new figures have revealed.
Overall sales were flat in December, against an increase of 1.4 per cent in the same period last year – the lowest growth since April 2017 and the worst Christmas sales period since 2008.
The poor sales figures from the British Retail Consortium come despite heavy discounting by retailers throughout the festive period in a bid to lure in shoppers. Sports Direct boss Mike Ashley branded the pre-Christmas sales period the “worst … in living memory” for retailers.
Some firms – including Ashley’s House of Fraser – have posted disappointing results for the period but others, including discount supermarkets Aldi and Lidl have seen near-double-digit growth.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Squeezed consumers chose not to splash out this Christmas with retail sales growth stalling for the first time in 28 months. The worst December sales performance in ten years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger.”
She added: “The retail landscape is changing dramatically in the UK, while the trading environment remains tough. Retailers are facing up this challenge but are having to wrestle with mounting costs from a succession of government policies – from the apprenticeship levy, to higher wage costs, to rising business rates.”
Online retailers fared marginally better than their bricks and mortar equivalents. Online sales of non-food products grew 5.8 per cent in December, against a growth of 7.6 per cent in December 2017 – above the three-month average of 5.5 per cent, but below the 12-month average of 6.9 per cent.
Over the three months to December, food sales increased by 0.6 per cent on a like-for-like basis and 1.8 per cent on a total basis, but this was below the 12-month total average growth of 3.1 per cent.
Paul Martin, UK head of retail at KPMG, which co-authored the report, said: “This comes despite some retailers desperately attempting to generate sales through slashed pricing, which has seemingly not been enough to encourage shoppers.
“As many retailers report their festive trading performance, the list of winners and losers will become clear, but winning means more than just improving sales. Retailers have to protect their margins in order to deliver a profitable festive season.”