Retail figures confirm wintry forecasts for December sales
BRC monthly survey shows catch-up Christmas shopping failed to compensate for big freeze, with December sales down 0.3%
A rush to the shops by consumers in the days before and after Christmas failed to compensate retailers for the business lost during December’s big freeze, according to a report released today.
The monthly snapshot of the high street from the British Retail Consortium (BRC) showed that like-for-like sales in December were 0.3% lower than in the same outlets a year earlier.
Stephen Robertson, BRC’s director general, said: “The unusually early winter weather made a difficult Christmas worse. With mounting concerns about the impact of spending cuts and the wider economy, sales growth has been weak since last summer. December was always likely to be similarly unspectacular but the snow and ice dealt an extra blow to business for many retailers.”
The monthly survey from the BRC and the consultancy group KPMG said total sales – once the expansion of floor space was taken into account – were up 1.5%, but warned that 2011 was likely to be a challenging year for shops and stores. In December 2009, like-for-like sales rose by 4.2% on December 2008, while total sales were 6% higher.
“Catch-up shopping gave a big boost to the week just before Christmas and the post-Christmas clearances were strong for non-food retailing but neither was enough to replace every sale lost earlier in the month,” Robertson said.
“Generally, people did spend on food for the big day. They had a celebration, but a combination of weather and worries led them to cut back on presents. With the big day over, there was a rush to the shops for discounted sales items but customers hit the brakes on buying food and drink.
“This is no return to the dire picture two years ago, but the message for the chancellor is: concentrate on delivering growth and leave any new burdens out of your March budget.”
‘Decent performance’ at Debenhams
The department store chain Debenhams said yesterday it lost £30m of sales during the disruption caused by the snow last month.
Like-for-like sales in the last 19 weeks fell by 1.3%, with chief executive Rob Templeman laying the blame for the decline firmly on December’s wintry conditions, saying sales would otherwise have been up to 3% higher.
“The performance of our business year-to-date has been pleasing, especially given the widespread disruption in December caused by bad weather,” he said.
Some City analysts were encouraged that Debenhams reported an increase in gross profit margins. The company said levels of leftover stock were at an “all-time low”, implying that there will be less need to slash prices to shift unsold products.
“In light of the snow impact, this is a decent performance from Debenhams and, now the snow has gone away, we expect performance on a cumulative basis to be gradually clawed back, albeit probably not entirely,” said Matthew McEachran of Singer Capital Markets.
“They indicate that stocks are well under control, gross margins are ahead year on year, and the planned strategic changes continue to be implemented, unaffected by the pre-Christmas disruption,” he added.
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