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Year-on-year growth in retail sales value slows despite an online boost

YEAR-on-year growth in UK retail sales value slowed further in the key trading month of December, even though online sales leapt, an industry survey reveals.

The survey, published today by the British Retail Consortium, shows that the value of UK retail sales last month was up 1.8% on a year earlier. Excluding April, when the pattern of sales was distorted by the timing of Easter, this was the weakest year-on-year growth in sales value since December 2012 on the BRC measure.

But the BRC, noting that increased confidence had not always been matched by money in people's pockets, described December sales as "respectable".

It highlighted the fact that online sales last month, in the non-food category, were up 19.2% on December 2012.

Overall, the BRC cited strong sales in the health and beauty, and clothing categories.

David McCorquodale, head of accountancy firm and BRC survey sponsor KPMG's UK retail sector practice, underlined the increasing importance of online sales channels.

He 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.

"Overall, the month was slightly positive, particularly in fashion and health and beauty, with traditional gifts playing their part."

Mr McCorquodale added: "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."

He observed that the food retailing category had remained the most competitive, with "discounting and price wars testing customer loyalty".

He added: "Today's savvy consumer is happy to shop around for a bargain."

Helen Dickinson, director-general of the BRC, declared that the December sales result had met expectations at the end of a year of "encouraging but fragile recovery".

She added: "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."

She added: "Multi-channel 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."

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