The latest release from the British Retail Consortium Retail Sales Monitor (BRC-RSM) reports that UK retail sales fell by 0.9% over the two months of November and December combined, ending a year in which overall sales fell for the first time ever in the life of the BRC measure. While sales for December alone were up by +1.9%, this performance was heavily flattered by the shift of Black Friday into the month from November in 2018, disguising the underlying decline.
Food and grocery growth continued to slow
While remaining marginally positive in December, food and grocery sales struggled for the usual Christmas spending boost, with shoppers distracted by a welter of factors including the General Election on the 12th of the month. Over the last quarter of 2019 growth in food and grocery sales fell back to just 0.7%, with like-for-likes wholly flat, and well behind the 12-month average of 1.4%.
Online in non-food hits new share high
Boosted by the inclusion of the Black Friday promotional event in the month, online sales of non-food products saw significant growth in December, leaping 12.8%, substantially above the current 12-month average of 3.3% and the highest rate seen in 2019. This drove online participation in non-food sales to 34.5%, a notable gain on December 2018, when the online share was 31.2%.
Susan Barratt, Chief Executive, IGD commented:
'December's food and grocery sales ended 2019 on a downbeat note. Despite the influence of some inflation across the market, shopper spending was not as expected for such a key sales period. As a result, while the value of spending wasn't down, growth was negligible and volumes declined - a rarity for Christmas in recent times. Despite their financial confidence remaining subdued, shoppers appear to be a little bit more optimisitic for 2020. Fewer expect food prices to be more expensive, with 75% of shoppers taking this view, compared with 78% in November. This is also the first time since June '18 that just as many shoppers predict they will focus more on quality versus saving money in the year ahead, when food and grocery shopping (18%). With healthy options one of the top ways shoppers define prodocts as higher quality, retailers and suppliers have an opportunity to engage with shoppers looking to improve their diets this month. As health remains the biggest driver for following a vegan or vegetarian diet we anticipate the plant-based trend to continue to gain traction.'