Worst December sales slump on record for UK retailers

By Katie Bird

- Last updated on GMT

Related tags: Retailing

Struggling health and beauty retailers were in good company this Christmas as all sectors except food and footwear suffered a drop in sales.

December was the sixth month in a row that toiletries and cosmetics sales were down on last year’s figures, according to the report by the British Retail Consortium (BRC) and KPMG.

Bargains and promotions attracted the attention of many visitors in the high street and shoppers were seen to trade down on core toiletries and healthcare.

However, fragrances did show good sales in the run up to Christmas, the most important period in the year for the division, according to the study.

Worst figures in 14 years

Almost all the other retail sectors suffered during the month and general figures state that December 2008 recorded the worst ever sales growth figures for retailers since the BRC started records 14 years ago.

Sales fell 3.3 percent on a like-for-like basis, excluding spending in stores that opened and closed during the year, and 1.4 percent on a total basis, during the month.

The first half of December was particularly tough as people delayed their Christmas purchases until the last minute in the hope of early discounts and sales.

'Dreadful numbers'

“These are truly dreadful numbers. Some retailers were more successful than others and the second half of December was better than the first. But overall the food sector was almost the only one to show growth.

“Otherwise, non-food retailers had a torrid December despite a blizzard of promotions and deals, which would have hit margins. Many hard-pressed customers couldn’t be seduced into spending,” ​said director general of the BRC Stephen Robertson.

Helen Dickinson, KPMG’s head of retail, said such a bad December does not predict well for the year ahead.

December sets the pace for 2009

“December’s performance has historically set the scene for the year ahead, so the outlook is indeed bleak…Although the food sector continues to hold up, most non-food retailers are having to manage the ‘double whammy’ of falling sales and falling margins and this doesn’t look like changing any time soon,”​ she said.

Contrastingly, internet, mail order and telesales were looking good with sales up 30 percent on last December, although this doesn’t make up for the high street’s weak performance.

“Some retailers offered later dates for guaranteed Christmas delivery this year. While this is a fast-growing sector, it still represents too small a part of total spending to compensate the poor performance of retailing overall," ​said BRC’s head of non store retailing Sharon Hardiman.

Related topics: Brand Innovation, Market Trends

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