Christmas shopping

Retailers had to wait … but in the end they had a good Christmas at the tills

A strong last week of food sales before Christmas rescued the vital festive period for UK retailers, according to the latest figures from the BRC/KPMG - but shoppers made supermarkets sweat by leaving their buying down to the wire.

UK retail sales increased by 1% in December compared with the same month last year, which was also an increase (0.1%) on the previous year.

The report said there was a slow start to the Christmas trading period, but the week before the day itself was a “bumper” period that “exceeded expectations”, delivering the majority of sales growth for the month and proving bigger than the Black Friday period - unlike last year when the reverse was true.

“It was a polarised month as shoppers held out for the Christmas week, which saw sales up around 40% compared with the other weeks of the month,” said BRC chief executive Helen Dickinson.

“Food sales were the major contributor to total growth, while non-food sales on the other hand were sluggish overall, despite a strong performance by categories driven by gifting items.”

“In the end, total growth for 2016 was 1.2% - a marginal increase in pound terms over the previous year but lower than the year-on-year growth achieved in 2015. The challenge for retailers in 2017 will be to create real growth against a backdrop of growing inflationary pressures and persisting economic and political uncertainty.”

Paul Martin, UK head of retail at KPMG, added: “December ended on somewhat of a positive note for retailers, with like-for-like sales rising by 1% on the previous year. Retailers were helped by the timing of Christmas, which fell on a Sunday, giving shoppers the chance to use the weekend for a final dash to the shops delivering a last minute boost to sales,”

Over the three months to December, food sales increased 1.1% on a like-for-like basis, which was the highest three-month average total growth since September 2013.

Non-food retail sales in the UK rose 1.1% on a like-for-like basis over the same period while online sales grew 7.2% and in-store sales declined 1.4% on a like-for-like basis.

IGD chief executive Joanne Denney-Finch said: “The grocery year ended on a high, with a substantial sales increase versus December 2015. Shoppers took their Christmas food and drink spending even closer to the wire than usual, with a record-breaking week leading up to the 25th. This sealed a strong second half of the year for food retailers.”