Business

Retail sales drop in December as consumers shift shopping to Black Friday

Retail sales dropped across the UK as a whole in December according to the ONS, but rose in Northern Ireland

RETAIL sales dropped in December as shoppers increasingly shifted spending to the Black Friday promotional period.

Volumes fell by 0.9 per cent on November as all sectors except food and fuel declined compared to the previous month, according to the Office for National Statistics (ONS).

Annual sales growth inched higher to 2.7 per cent compared with 2 per cent in 2017, though this marked a slowdown compared to the post-recession peak of 4.7 per cent seen in 2016.

In the three months to December, the quantity bought decreased by 0.2 per cent.

Estimates for the amount spent in December were 3.7 per cent higher than the same period in the previous year, while the quantity bought was up 3 per cent.

Online retailing accounted for 20 per cent of total retailing, with weekly spending at £1.9 billion during December.

Month-on-month growth was seen across all sectors online, except household goods stores and other non-food.

Household goods declined 17.9 per cent following Black Friday promotions, which boosted sales in November 2018.

Howard Archer, chief economic adviser at EY ITEM Club, said the drop in December volumes was a "disappointment" for retailers.

"This pointed to Black Friday-related promotions primarily bringing retail purchases forward to November from December rather than lifting sales overall," he said.

"The extended squeeze on purchasing power has encouraged consumers to become more savvy in their Christmas shopping ."

Graeme MacLaughlin, relationship director at Barclays in Northern Ireland, said: "It's a complicated trading environment across the UK, with comparisons remaining difficult due to a constantly evolving discounting season.

"Although the UK retail sector will certainly have been hoping for a stronger December overall, there were some winners out there and it's important to caution that we need to see January's data before we can entirely judge the festive sales period.

"While footfall figures are down in the UK, the Northern Ireland high street is bucking the trend with figures for December reporting a 4.1 per cent increase. December was the third month of growth in high street footfall across the region."

He added: "We have to retain some perspective as we consider the retail sector's prospects for 2019. Despite the hype, reports of the death of the high street are greatly exaggerated.

"Yes, online is growing and having an impact on pricing, but the figures show that 80 per cent of our spending is still done in-store, so we think speculation that we're on the verge of a fundamental shift in how UK shoppers approach retail are wide of the mark.

Brexit uncertainty is weighing on consumer confidence and making it difficult for retailers to plan for the future, but they have to simply get on with it and try to influence the factors within their control; retaining a focus on product innovation, controlling costs and making sure their online and physical platforms complement each other and boost sales.

"If and when there is more clarity around Brexit, we would hope this would have a positive impact on consumer confidence.”

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