Online sales came to the rescue in the important Christmas shopping period, seeing a greater increase than on Black Friday.
The BRC KPMG Retail Sales Monitor for the three months to December 31 showed that online sales grew by 7.2 per cent, while in-store sales declined 1.2 per cent on a total basis and 1.4 per cent on a like-for-like basis.
Non-food sales in the UK increased by 7.2 per cent in December 2016, compared with the same period a year ago where sales increased 15.1 per cent. This is the first growth below 10 per cent in four months.
UK non-food retail sales increased one per cent on a like-for-like basis in December, compared with a 0.1 per cent increase in the same month in 2015.
On a total basis, sales rose 1.7 per cent, against a one per cent increase in December 2015.
In the three months to December 31, non-food retail sales in the UK rose 1.1 per cent on a like-for-like basis and 1.3 per cent on a total basis, which was ahead of the 12-month average of one per cent, but is the lowest non-food 12-month average total growth since October 2012.
The BRC KPMG Online Retail Sales Monitor showed that in December, online sales represented 24.9 per cent of total non-food sales, compared with 22.6 per cent in the same month in 2015.
In the three months to December 31, online sales of non-food products in the UK grew by 9.5 per cent year on year.
Helen Dickinson, chief executive of the British Retail Consortium, said: “December is the most important trading period of the year and with sales across 2016 growing more slowly than the previous year, it was all to play for in the final month. Despite the slow start to the Christmas trading period, the week itself was a bumper one and exceeded expectations. It delivered the majority of sales growth for the month, proving even bigger than the Black Friday period, which is the reverse of what we saw the year before.
“It was a polarised month as shoppers held out for the Christmas week, which saw sales up around 40 per cent compared with the other weeks of the month. 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 per cent – 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. To this end, we’ll be continuing our work with Government to encourage policies that help retailers keep prices down for consumers.”
Patrick Munden, global head of retail and marketing at e-commerce consultancy Salmon, added: “It’s unsurprising to see UK retail sales increase by one per cent year on year in December, but the real winner here is online retailing. Overall, online sales represented almost a quarter (24.3 per cent) of the total non-food sales, confirming what everyone in the industry expected.
“We are seeing a greater shift taking place towards online services and stores must recognise the importance of a convenient, smart and, importantly, digitally-led offering. Technologies like programmatic commerce, for example – automatic purchases via IoT-connected devices – will only grow in prominence as consumers crave the most efficient service.”
He concluded: “December is obviously a crucial period for retailers, who must look at continuing the traffic experienced during Black Friday in order to reap the rewards of the hugely competitive festive period. The news that online retailer Boohoo posted an increase in revenue, while traditional high-street store Next endured a stark sales fall, goes to show the challenges that lie ahead for those without a strong digital engagement.
“Those looking to succeed in 2017 must take on board innovative retail ideas and ensure a comprehensive ecommerce offering is in place if they are to keep up with the likes of Boohoo, Asos and industry leader Amazon.”