The prospect of a no-deal Brexit, company voluntary arrangements, shop closures and job losses resulted in the “the worst year on record” for retail in 2019.
UK total retail sales for 2019 dropped by 0.1% compared with 2018, the British Retail Consortium (BRC)-KPMG Retail Sales Monitor showed, making it the worst year since the index began in 1995.
Meanwhile, UK retail sales increased by 1.7% on a like-for-like basis from December 2018, when they had decreased 0.7% from the preceding year. Taking November and December together to reflect the Black Friday distortions, like-for-like sales declined 1.2% compared with the same period in 2018.
Over the three months to the end of December, non-food retail sales in the UK decreased by 1.6% on a like-for-like basis and 1.4% on a total basis.
Online non-food sales increased by 12.8% in December, against growth of 5.8% in December 2018. Taking November and December together to iron out the Black Friday distortions, online non-food sales increased 2.6%, which is lower than the 12m average of 3.3%.
The December figures were positively distorted by the late timing of Black Friday weekend, which occurred in December 2019 [RSM dates based on ONS methodoloday] as opposed to November in 2018. The three-month and 12-month averages were not distorted.
“2019 was the worst year on record and the first year to show an overall decline in retail sales,” said Helen Dickinson, chief executive of the British Retail Consortium.
“This was also reflected in the CVAs, shop closures and job losses that the industry suffered in 2019. Twice the UK faced the prospect of a no-deal Brexit, as well as political instability that concluded in a December general election – further weakening demand for the festive period.
“The industry continues to transform in response to the changing technologies and shopping habits. Black Friday overtook Christmas as the biggest shopping week of the year for non-food items. Retailers also faced challenges as consumers became both more cautious and more conscientious as they went about their Christmas shopping.
“Looking forward, the public’s confidence in Britain’s trade negotiations will have a big impact on spending over the coming year. There are many ongoing challenges for retailers: to drive up productivity, continue to raise wages, improve recyclability of products and cut waste. However, this takes resources, so it is essential the new government makes good on its promise to review, and then reform the broken business rates system, which sees retail pay 25% of all business rates, while accounting for 5% of the economy.”