A Christmas to forget on the high streetLatest sales figures show poor performance

14 January 2009

Sales Shopping

New figures from the British Retail Consortium (BRC) show just how deeply the current economic climate is being felt on the high street.

The trade body’s latest figures give a sector-by-sector breakdown of how retailers performed in December – traditionally the busiest time of the year.

Food and drink

Food and drink was one of the few sectors to see an increase in sales – although there was clear evidence of consumers tightening their belts with supermarket value ranges performing well and sales of basic groceries up as people shunned expensive ready meals and cooked from scratch.

Yet December’s figures represented the weakest sales growth since March – and the BRC said sales were inflated by higher prices.

Online sales up

Online and mail order retailers also performed well with sales in this sector up 30% compared to the same period last year. There was strong growth between November and December which suggests that consumers are becoming more confident about leaving internet shopping until nearer Christmas.

However, Sharon Hardiman, head of non-store retailing at the BRC, warned: ‘While this is a fast-growing sector, it still represents too small a part of total spending to compensate the poor performance of retailing overall.’

Clothing and footwear down

Sales in the clothing and footwear sector were down compared to last December although the decline seen in November was slowed by discounts, as many stores held special promotions or began their Christmas sales early.

That meant that although sales went up, profit margins were often squeezed. Sales have now fallen year-on-year for 14 of the past 15 months, with sunny May the only month to buck the gloomy trend.

Housing market causes gloom

The slumping housing market and tightened household budgets saw sales of white goods - fridges, freezers, microwaves and so on - continue to do badly.

Meanwhile sales of brown goods - entertainment equipment for the home such as TVs and camcorders - were down on their performance a year ago, although clearance sales and Christmas shopping led to relatively good sales of digital cameras, sat navs and electrical beauty appliances.

Predictably, the weak housing market also hit DIY and gardening retailers, but the trend towards improving rather than moving your home supported sales of hardware and power tools.

And after seeing its largest year-on-year fall for at least eight years in October, the stagnant housing market also meant a miserable December for the furniture and floor coverings sector.

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