UK December retail sales: woes of non-food sector offset by highest ever spend in grocery

Date : 12 January 2021

Patrick Mitchell-Fox

Senior Retail Analyst

The latest release from the British Retail Consortium Retail Sales Monitor (BRC-RSM) shows that UK retail sales grew by 1.8% in December, with non-food sales again significantly restrained by the progressive imposition of shut-downs of ‘non-essential’ retail in large parts of the country as coronavirus infection rates surged in the run up to Christmas. In the most disrupted year for business in recent times UK retail sales ended the full 12-months of 2020 down 0.3% versus 2019.

Food & grocery sales up 7.5% in the final quarter of the year

Maintaining the trend triggered by the onset of the pandemic back in March, food & grocery sales continued to see a significantly elevated level of growth into and through the Christmas period. While changing infection-related restrictions impacted the scale of people’s Christmas celebrations many were more than happy to trade-up to ensure the festive season was marked in style. Moreover, as one of the few sectors still trading throughout December, food & grocery also benefitted as a major source of gifts for family and friends. In comparison non-food retailing (despite of growth online) continued to take significant impacts from the pandemic with sales down 1.5% in the last three months of 2020.

Online share in non-food sales at 46% for the full year

With December seeing strong growth in online non-food sales, up 44.8% in the month, total annual growth for 2020 stood at 36.2%. This growth has been marked across every category in non-food, with a growing number now notable for an online share well in advance of 50%. Perhaps unsurprisingly household appliances and computing, always strong for online sales, have the biggest online participation of all, now both in the vicinity of 80%. As a result, though store-based sales were in significant decline before 2020, this latest year has rapidly accelerated that decline beyond the point of likely recovery in categories such as these.

Susan Barratt, Chief Executive, IGD commented:

‘December 2020 saw the highest ever festive spending in the UK food and grocery retail sector and was largely in line with the elevated trend through the year. Tightening restrictions across much of the country limited other sales channels and enabled supermarkets to get the full benefit of people celebrating with food and drink. Though last-minute changes put the brakes on larger family gatherings, shoppers nevertheless sought to make up for their disappointments by trading up to treat themselves and their immediate households with premium and luxury lines. IGD’s Shopper Confidence Index remained stable in December, boosted by the introduction of new vaccines for COVID-19. Focus turned to Christmas food shopping and there was a significant uplift in online grocery shopping over the festive period. Shopper confidence will remain fragile as shoppers grapple with the impact of the new national lockdown, economic downturn and a new relationship with the EU.’

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