Snow shatters retailers' Christmas dreams
British Retail Consortium and KPMG figures show bad weather put pay to any hope of Q4 growth
Arctic weather conditions piled more misery on battered retailers over the Christmas period, with overall sales dropping 0.3 per cent in December.
The figures, released by the British Retail Consortium (BRC) and KPMG, revealed a stark difference to December 2009, which saw a 4.2 per cent increase in sales.
On an annual basis, total sales were up 1.5 per cent compared with six per cent in 2009. Online, mail-order and phone sales of non-food items did grow 18 per cent in December despite the snow, but this is compared with a 26.5 per cent rise in December 2009. Shoppers appear to be putting off buying larger items due to fears about jobs and the economy.
Stephen Robertson, director general of the BRC, said: “The unusually early winter weather made a difficult Christmas worse. With mounting concerns about the impact of spending cuts and the wider economy, sales growth has been weak since last summer. December was always likely to be similarly unspectacular but the snow and ice dealt an extra blow to business for many retailers.”
Robertson said that ‘catch-up’ shopping did give a boost to the pre-Christmas week, and the competitive post-Christmas sales helped swell the figures, but neither was enough to replace all the sales lost earlier in the month.
“There is no return to the dire picture two years ago, but the message for the Chancellor is: concentrate on delivering growth and leave any new burdens out of your March budget.”
Helen Dickinson, head of retail at KPMG, said: “December is the biggest month of the year with volumes 20 to 30 per cent higher than other months. Very disappointingly, without the impact of the arctic weather the results would have been noticeably better.
“The gap between food and non-food grew as the non-food sectors saw a decline in the value of sales against Christmas of 2009 whereas food sales growth continued at close to the existing run rate.
“Food sales dropped off after a good pre-Christmas week. In contrast, non-food improved as shoppers headed out in the final week to take advantage of clearance bargains in advance of the VAT rise, so releasing a level of pent-up demand.
“However, this was not enough to make good the pre-Christmas shortfall and was at lower margin due to the commencement of the sales. 2011 is set to be challenging year.”