Disappointing Christmas sales figures are becoming something of a trend amongst UK retailers, and sadly 2016 followed the pattern that experts are growing increasingly familiar with. December saw high street sales fall for the fourth consecutive year, even with a ‘stellar performance’ in the week leading up to Christmas Day. According to the figures released by BDO High Street Sales Tracker, a respected authority in the statistical arena, like-for-like sales came in 0.1 per cent lower than those for December 2015. This was seen across 70 mid-market retailers and over 10,000 individual stores.
Although the drop may seem marginal, it follows on the back of a record 5.3 per cent fall for the same month in 2015: the worst result (at that point) since December 2008, and a title that the latest figures have allowed 2016 to supersede.
As BDO authority Sophie Michael explains: “With such a weak base for December 2015, any further decline can only be seen as a poor result for retailers.”
This has raised concerns for the year ahead, when the full impact of Brexit is expected to come to a head: “Coming at a critical juncture, this fourth negative December in succession highlights the magnitude of the challenge… for 2017, when consumers will more keenly feel the bite of inflation and a falling pound”, she added.
The upside is that this slump could have been far worse if not for the increase in retail sales in the week leading up to Christmas, which represented an 11.7 per cent year on year growth statistic.
Online retail figures were similarly upbeat, with a 51 per cent increase in the week leading up to 25 December. As a result, total online sales growth for the month equalled a healthy 19 per cent.
One explanation for this discrepancy between online and high street figures is the weakened state of the pound. An enticing incentive for foreign consumers to buy from UK-based retailers, it likely prompted a surge in overseas sales.
As Ms. Michael suggests: “We have seen a shift towards online for a number of years, but it was more pronounced in December partly because the weak pound drew spending from overseas. It’s also the convenience and comfort of being able to shop from your own home.”
With the shift to online sales growing ever more pronounced, could we be seeing a pattern that will emerge even more strongly in 2017? The answer remains to be seen, but intuition suggests that this may well be the case.