Consumers Return With a Vengeance in December, Concerns Still Linger

According to the latest edition of the BRC-KPMG Retail Sales Monitor, which covers the period of November 29th 2009 to January 2nd 2010, released today:

• UK retail sales values rose 4.2% on a like-for-like basis from December 2008, when sales had contracted 3.3% due to turmoil in financial markets hitting consumer confidence. On a total basis, sales rose 6.0%, against a 1.4% decline in December 2008.
• The three-month weighted average saw food sales rising 2.6% on a like-for-like basis and 4.4% on a total sales basis, compared to the same period in 2008. Food sales growth picked up to its strongest since June, partly reflecting higher food price inflation.
• The three-month weighted average of non-food sales grew 3.8% on a like-for-like basis and 6.0% on a total sales basis, compared to the same period 2008. Wintry weather boosted clothing and footwear whilst health and beauty picked up, helped by Christmas gifting. Homewares sales showed further gains but against larger declines a year ago. However, furniture slowed.
• Non-food non-store sales (internet, mail-order and phone sales) in December were 26.5% higher than a year ago, compared with a 16.9% increase in November. Some benefited from shoppers buying online when snow prevented them getting out.

Commenting on the figures Helen Dickinson, Head of Retail at KPMG, said,

“Christmas really provided an opportunity for strong retailers to ‘strut their stuff’ and, although the stream of trading updates has only just started, we will see a pronounced polarisation between retailers who got the proposition right and those that did not. However, the results are flattered by the impact of higher shop prices, given the reductions made in December 2008 following the VAT cut. But, despite this and despite the weather, the consumer demonstrated a strong desire to spend. All sectors, with the exception of furniture and flooring for which the upward trend of recent months slowed, performed well. December’s results also showed the growing importance of post-Christmas trading but, given the economic outlook, they are unlikely to be indicative of the trend for the rest of the year”.

Data: British Retail Consortium [PDF].

Note: The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of retail sales from a sample of retailers. The Monitor measures the value of spending and doesn’t adjust for price changes. In the case of price inflation, sales volumes will increase by less than sales values. During periods of price deflation, sales volumes will increase by more than sales values.

Similar posts which may be of interest:

1. Retail Spending Muted as Consumers Remain Cautious
2. Retail Sales Rise as Consumer Confidence Trickles Back
3. London Retail Sales Rise, Confidence Still Fragile
4. Retail Sales Mixed Bag: Essentials Up, Discretionary Down
5. Food Price Inflation Seen Bottoming as Non-Food Deflation Contracts
6. Asking Prices Rise 2.8 per cent on Month, Register First Year-on-Year Gain Since June 2008