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Shoppers cut spending

BRC figures show dismal end to 2017 for High Street retailers

  

HIGH Street retailers faced a dismal end to 2017 despite Black Friday efforts as inflation-hit households cut back on overall spending and shopped online, figures from the British Retail Consortium and KPMG have revealed.

The Telegraph newspaper reported on Tuesday, January 9, that retail sales fell by 1.9 per cent on a like-for-like basis including online and in-store purchases in the three months ending December 2017 – the weakest retail performance in the UK since March 2009.
There was a sharp contrast between sales made in-store and online, however, as shoppers increasingly turned to internet deals.
High Street retailers had a poor show in the last three months of 2017, seeing sales fall by 4.4 per cent on a like-for-like basis, the worst fall recorded by the BRC for five years.
By contrast, internet sales continued to increase at the end of the year, with purchases of non-food products growing by 7.6 per cent in the month. That rise brought the level of overall online penetration of the retail market to nearly a quarter, at 24.1 per cent, up just over a percentage point on 2016.
Consumers' appetite for food purchases remained fierce compared to other goods, with a 2.6 per cent increase in sales compared to the same time last year.
BRC chief executive Helen Dickenson said: “The divergence between growth in sales of food and non-food has never been so stark,” and blamed “inflation outpacing income growth” as shoppers were increasingly focusing on buying essentials such as food, to the detriment of treats and Christmas presents.
She added: “With spending likely to remain under severe pressure in the next few years, it’s imperative that in the forthcoming trade negotiations, the Government does all it can to avoid adding new tariffs to existing price pressures.”
Paul Martin, of finance and accountancy firm KPMG, said Christmas trading had delivered “meagre” like-for-like growth, with just a 0.6 per cent rise in December. Grocers benefited from “festive feasts” and online categories grew across the board, he added.
Figures from Barclaycard – based on an analysis of their share of UK debit and credit transactions – painted a similarly gloomy picture with spending growth in the last quarter of 2017 down by 0.8 percentage points compared to the year before. The findings also showed 61pc of consumers said they do not feel confident about the economic outlook.
A rally in spending ahead of Christmas helped make the year-on-year shrink in growth less severe, “boosting an otherwise muted quarter”, according to Paul Lockstone, managing director at Barclaycard.
The firm’s analysis also found that most consumers are set to bargain-hunt in discount stores and during sales in the year ahead. One in three shoppers were determined to spend more on experiences with friends and family rather than buying new physical items, the Barclaycard report said.


Images from www.telegraph.co.uk


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