LAST year was the worst Christmas for retailers since the financial crisis in 2008, new figures have revealed.
Many shops cut prices in December to lure shoppers through its doors and to its websites, yet sales dropped by 0.7 per cent in 2018 compared to the previous year.
In December 2017, total retail sales had risen by 1.4 per cent year on year, the report by the British Retail Consortium (BRC) and KPMG retail sales monitor said.
Retailers such as Tesco, Marks & Spencer, Debenhams, B&M and car and cycling chain Halfords reported financial results today, and they all saw falling sales over the Christmas period apart from Tesco.
M&S saw clothing and home sales fall by 4.8 per cent, while Halfords sales dropped 1.7 per cent after warm weather hit its sales.
Debenhams and B&M also suffered from falling sales, with the chains reporting drops of 3.4 per cent and 1.6 per cent, respectively.
Meanwhile, Tesco reported its best Christmas results in a decade with a 2.2 per cent rise in UK like-for-like sales.
Helen Dickinson, chief executive of BRC, said: “Squeezed consumers chose not to splash out this Christmas, with retail sales growth stalling for the first time in 28 months.
“The worst December sales performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger.”
She said the retail landscape is “changing dramatically” in the UK, while the trading environment remains tough.
“Retailers are facing up to this challenge but are having to wrestle with mounting costs from a succession of government policies – from the apprenticeship levy, to higher wage costs, to rising business rates,” she continued.
Meanwhile, Paul Martin, UK head of retail at KPMG, commented: “Retailers experienced little festive cheer this year, with total sales in December delivering zero growth on last year.
“This comes despite some retailers desperately attempting to generate sales through slashed pricing, which has seemingly not been enough to encourage shoppers.”
“Growth in food did provide a glimmer of hope, being among the few categories to notice an uptick,” Martin continued.
“However, the continued contrast in performance between the high street and online remained evident in December – albeit 2018 did also see a continued slowdown in online retail sales.”
Meanwhile, a separate report from Barclaycard said consumer spending grew 1.8 per cent year on year in December, the lowest rate of growth seen since March 2016.
Data from Barclaycard, which sees nearly half of the UK’s credit and debit card transactions, showed that essential spending growth dipped to just 0.6 per cent – the lowest figure recorded since July 2016 – caused by a drop in supermarket spending.
Esme Harwood, director at Barclaycard, said: “Growth in consumer spending dropped to its lowest level since 2016 and represents a decline in real terms.”
She said consumers “remain cautious amidst ongoing economic uncertainty”.
More high street job cuts are on the horizon for this year as brutal conditions saw 150,000 lost in 2018.
But empty shops could be turned into homes to help solve the housing crisis, Chancellor Philip Hammond announced in October’s Budget.
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