High Streets Initiative · 9 January 2018

High street retailers struggle as squeezed shoppers cut back to essential items

Non-food sales registered the steepest decline since 2012
Non-food sales registered the steepest decline since 2012
High street business owners ended 2017 with the steepestdecline in sales forfive years, as retail experts warn consumer spending power has been absorbed by essential items.

According to fresh figures from the British Retail Consortium (BRC) and KPMG, year-on-year retail sales declined 0.6 per cent in December 2017. In contrast, year-on-year sales in December 2016 had increased by one per cent.

The greatest indication of the tough environment in which high street retailers finished 2017 was the disparity between food and grocery sales and non-food items.

While food sales rose 2.6 per cent in the three months to Christmas, non-food sales in the UK decreased by 1.9 per cent, the lowest since March 2009.

the divergence between growth in sales of food and non-food has never been so stark, said Helen Dickinson, chief executive of the BRC.

She added: With inflation outpacing income growth, shoppers continued to see more of their spending power absorbed by essential items, including food, leaving less left over for buying Christmas gifts.

Category growth rankings (source: BRC)
Category growth rankings (source: BRC)
Overall, Christmas trading delivered year-on-year growth of just 0.6 per cent. However, online sales rose 7.6 per cent.

whilst a proportion of this divide can be attributed to Cyber Monday, shoppers are increasingly preferring to shop online, especially at Christmas, said Paul Martin, head of retail at KPMG.

Martin added: Grocers benefitted from festive feasts, but growth elsewhere on the high street was otherwise rather muted for the time of year. In contrast, all online categories grew, with health and beauty, shoes and clothes proving particularly popular.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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