UK retail sales fall flat as non-food wanes, BRC-KPMG finds

UK retail sales were disappointingly flat in December, with a 0.1% like-for-like increase and total sales up 1.0%.

The monthly BRC-KPMG retail sales monitor data showed non-food sales endured their weakest growth since January 2013, rising 1.5% on the three months basis, while total food sales grew 0.2%.

With weather deteriorating towards the end of the year, online was the biggest beneficiary, with non-food sales growing 15.1% in December versus a year earlier, ahead of its 3-month and 12-month averages.

Non-food online penetration was 19.7%, up 2.4 percentage points from a year ago.

"The boost from online was not enough to make this a Christmas to remember for most retailers," said Helen Dickinson, chief executive of the British Retail Consortium, noting that the three month rolling total sales across all categories was the weakest for the entire year, with only 0.9% growth.

David McCorquodale, KPMG's head of retail added that Black Friday 2015 still had a significant impact on the shape of sales over the festive season, despite the efforts of many companies, with spending spread over six weeks rather than two.

"Fashion sales were the losers in December as mild weather deferred the need and wet weather deferred the inclination to try and buy a new winter outfit.

“December’s star performer was Home Accessories as consumers “decked the halls” with baubles and fairy lights to get into the festive spirit. Children’s Toys also had a good month as Santa delivered to “those who’d been nice” on Christmas morning.”

Looking forward, Dickinson noted that retailers were not benefiting from the improved economic climate in the same way that other sectors have done.

"This is in part due to changing consumer shopping habits and the rising cost of doing business for retailers such as business rates and the national living wage due to be introduced in April."