Christmas sales uplift taken to the wire by shoppers

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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.”

Readers' comments (1)

  • Danielle Pinnington

    The key themes from Christmas so far are continued growth in online and a positive picture for the Discounters, whilst mid-range players have struggled.

    Food is a relatively cheap way of making Christmas Day feel special, so it will be interesting to see how the premium end of the grocery sector has done later this week. At the opposite end of the spectrum Aldi have reported record Christmas sales, siting their ‘premium’ Specially Selected range as a key performer.

    The Discounters certainly haven't sat back and relaxed after the gains of the last few years. Continued store openings, refurbishments, and forays into premium ranges see them continuing to take the fight to their mainstream competitors. And they are doing that not just through value, but by recognising that today’s shoppers have choices, and will frequent the store environments that appeal to them. Value is not a winning formula on its own – even if the economic environment gets tough again.

    As we saw in the previous recession, shoppers can flex their choices to make savings in the areas that they feel aren’t so important to them as individuals. It takes real understanding to know how to meet shoppers needs when times are tough, and real flexibility to turn that understanding into a retail offer that hits the spot.

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