Published Monday 13th January 2020

The Christmas period has traditionally been vital for retail businesses. However, over the last few years, it has often echoed the continuing decline of traditional high-street retailers. December 2019 appears to have followed a broadly similar pattern, signalling concerns for businesses across sectors as people’s spending habits over the period continue to evolve.

While many businesses struggled over the Christmas period, some have managed to create growth in an otherwise negative market. December 2019 has delivered some of the most eye-catching retail results in a long time, showing a clear indication of what consumers will be looking for over the coming year and beyond.

December 2019 – The Retail Picture

The British Retail Consortium’s UK Retail Sales Monitor for December 2019 indicates the changing face of the retail industry. According to the report, overall sales growth in December was 1.9%. However, this is believed to have been skewed by a later Black Friday at the end of November. Combining November and December, overall UK retail sales declined by 0.9%. The BRC also added that sales for the year 2019 were down by 0.1%, the first time an annual decline has been recorded across Britsh retail in 25 years.

Looking at individual sectors, it appears very few were able to create stable growth over the December period. According to Barclaycard, supermarket sales fell by 0.9% during the month, while games and toys fell by 4%. The only sector that managed to create significant growth was e-commerce, with the BRC report showing online sales up by 12.8%. Reports that overall footfall fell during the Christmas period back up this belief that people are more frequently turning to online for their shopping habits.

As with every festive period, winners and losers can be seen across the retail industry. In the supermarket sector, M&S reported growth in their food revenues but an overall disappointing Christmas period, due to low sales in clothing and home departments. Tesco managed December growth of 0.1%, while discount store Lidl reported some of the best figures in the sector, with sales up 11%.

A range of high-street staples also reported disappointing Christmas periods. Discount retailer B&M recorded sales growth of 8.8% which was “a slower performance than anticipated”, while John Lewis saw a reduction in like-for-like sales of 2.3% over the period. At the other end of the Christmas scale, many outlets reported positive Christmas periods, including Selfridges, London Designer Outlet and Springfields Outlet.

Consumer Habits Transforming Christmas Period

Many different headlines can be pulled from the latest Christmas period in British retail. Perhaps the most interesting result, however, is the impact that Black Friday has had on these figures. Almost a week later in 2019 (29th November) than in 2018 (23rd), the high-spend holiday is cited in nearly all reports as having skewed figures and dampened shopper’s enthusiasm over the Christmas period. These comments are despite many reporting Black Friday 2019 to have been disappointing in itself. According to the BRC’s December report, Black Friday overtook Christmas when it came to non-food sales.

As with many businesses outlooks over the last few years, Brexit uncertainty was cited as a potential cause of these latest results. The BRC report also notes that “consumers became both more cautious and more conscientious” with their Christmas shopping last year. This note ties in with other consumer trends that have been noted across sectors, creating new revenue streams for those who can take advantage. Selfridges noted ‘vegan demand’ as a factor for its 5% Christmas sales growth, while health and wellness staple Holland & Barrett saw like-for-like sales grow at 3.3%.

Another factor that these Christmas results further evidenced was the growing need and demand for consumer experiences in bricks-and-mortar retail. Hobbycraft reported retail sales growth of 8.9% over December, with a 5.3% like-for-like sales increase. This substantial growth was supposedly fuelled by demand for customised Christmas decorations, with personalisation workshops creating surges in demand. While footfall generally fell across the board, Centre:MK, one of the UK’s top shopping centres, saw a year-on-year footfall increase of 2.5%. This performance, alongside others such as London Designer Outlet, which reported its best Christmas trading period to date across its range of hosted sectors, shows that modern consumers are still willing to travel to an exciting destination, so long as it offers an engaging, customisable experience.

Overall, it’s fair to say that retail continues to transform at a rapid rate, causing major companies to perform substantial strategic changes to ensure long-term performance. Here at Expense Reduction Analysts, we’ve worked with some of the UK’s biggest retailers, helping them to streamline their supply chains and create solid foundations on which they can transform. Our industry experts can help to reduce retail operating costs across a range of areas, delivering effective procurement strategies which create long-term savings. If you are interested in discovering what we could do for your finances, why not get in contact with our team today?