UK retail environment likely to continue to be challenging through 2013 as retailers fight to win sales in no-growth economy: BRC

Cindy Allen

LONDON , January 7, 2013 (press release) – Against a tough backdrop for customers and retailers alike, Christmas trading was not exceptional, said new British Retail Consortium (BRC) Director General Helen Dickinson.

As the post-Christmas sales begin, she highlighted that there's every sign that the ongoing endurance test for retailers of trading in a largely no-growth environment is likely to continue well into 2013.

British Retail Consortium Director General Helen Dickinson said: "Overall, Christmas hasn't been a boom time for UK retailers but it hasn't been complete doom and gloom either.

"There are big variations in individual retail performances but, when the final sums are done, total spending is likely to be up modestly on last year though only broadly in line with shop price inflation.

"As always, there was a last minute Christmas rush. It came later this year because hard-pressed customers remain cautious, wanted to hold out for bargains and there was a final full shopping weekend immediately before Christmas that the calendar didn't provide last year.

"Online sales growth accelerated as we took advantage of the investment that many retailers have made in giving us the flexibility we now demand around delivery options like click-and-collect and security. We now feel much more comfortable about putting our credit card number into our mobile phone, but overall this channel represents just over 10 per cent of total retail sales.

"But, generally, customers bought only similar amounts to last year. Sales were hard-fought and often driven by discounts so cutting into margins, though retailers worked hard to ensure they had the right products available, whether in store or online, and at the right prices.

"Sales have not collapsed but the pressure is coming from adapting to conditions that consistently deliver minimal year-on-year sales growth. There is only so much cost cutting and new efficiency retailers can achieve.

"As we look to the New Year, utility prices are likely to edge up inflation and people are keen to continue paying down their debt, which means the amount of money they have in their pockets will remain under pressure. So, 2013 will be characterised by more of the same and there's every sign that the ongoing endurance test for retailers of trading in a largely no-growth environment is likely to continue well into next year."

Notes to Editors: The BRC's Retail Sales Monitor covering December will provide the first facts on overall December retail sales performance. It comes out before any comparable data and answers the question, "How much better or worse than last year was Christmas for UK retailing?" It will be issued on Monday 7 January 2013, embargoed for 00:01 Tuesday 8 January.

Further information about the BRC-KPMG Retail Sales Monitor can be found on our dedicated Business Information Services website.

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