2020 hits record low for retail sales growth

COVID-19 has led to 2020 being the “worst year on record” for retail sales growth, the British Retail Consortium (BRC) has said.

Total sales fell by 0.3% for 2020, compared with 2019. Sales increased by 1.8% in December, on a total basis, against a growth of 0.2% in December 2019.

UK retail sales increased 4.8% on a like-for-like basis from December 2019, when they had increased 0.2% from the preceding year. Over the three months to December, in-store sales of non-food items declined 24.7% on a total and 14.4% on a like-for-like basis.

For 2020 overall, in-store sales of non-food items declined 24%, compared with 2019. Online non-food sales increased by 44.8% in December, against a growth of 6.7% in December 2019.

Over 2020, online non-food sales increased by 36.2% compared with 2019. The non-food online penetration rate increased from 32.1% in December 2019 to 47.8% last December. The overall non-food online penetration rate in 2020 was 46.1%, up from 31.1% in 2019.

“COVID has led to 2020 being the worst year on record for retail sales growth,” said Helen Dickinson OBE, chief executive, BRC. “Physical non-food stores – including all of ‘non-essential’ retail – saw sales drop by a quarter compared with 2019.

“Christmas offered little respite for these retailers, as many shops were forced to shut during the peak trading period. Though this led to a rise in food-based gifts as many shoppers bought what they could from the shops that were still open.

“With shops still closed for the foreseeable future, costing stores billions in lost sales, many retailers are struggling to survive. To avoid the unnecessary loss of shops and jobs, the Government should announce an extension to business rates relief for the worst-affected businesses as soon as possible. With many retailers making decisions over their future, the Government must act decisively.”

Paul Martin, UK head of retail, KPMG, added: “In the most important month for the retail industry, there was some positive growth due to the on-going shift of expenditure from other categories such as travel and leisure.

“Once again we saw big swings in the types of products being purchased and the channels used for shopping, with much of the growth taking place online where nearly half of all non-food purchases were made. Household related and food item purchases were top of Christmas shopping lists with historic growth rates in contrast to fashion, accessories and beauty products which experienced double-digit declines.

“Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street and conditions will continue to be challenging as we enter another national lockdown. Consumer behaviour will also continue to evolve and retailers must embrace the changes if they are to hold on to hard-won customers and generate profitable sales.

”Looking ahead, fortunes will be mixed but pent up savings and a successful vaccine rollout will help support recovery in the retail sector later in the year. Retailers will also be hoping that the reopening of high streets and shopping centres will see a return to more normal levels of footfall.”

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