retail-clothes-rackIt’s the most important month of the year for retail, but how did it do?

Like for like UK retail sales rose by 1.0 per cent in December, year on year. In December 2015, they increased by a mere 0.1 per cent, suggests the latest BRC – KPMG Retail Sales Monitor for December.

The big success, however, belonged to online sales – up 7.2 per cent, while in-store sales declined by 1.2 per cent.

But it seems many shoppers left it to the last minute with Christmas week better than expected, but sales earlier in the month were not so good.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said: “It was a polarised month as shoppers held out for the Christmas week, which saw sales up around 40 per cent compared with the other weeks of the month. Food sales were the major contributor to total growth, while non-food sales on the other hand were sluggish overall, despite a strong performance by categories driven by gifting items.”

Rupal Karia, Managing Director of Retail & Hospitality at Fujitsu said: “The retail figures for December reveal a strong performance in the food and drink sector with the 3-month average of like-for-like food sales jumping up by 1.1 per cent. Undoubtedly, the Christmas period played a significant part as demonstrated by a 40 per cent sales jump compared with the other weeks of the month. However, non-food sales were rather sluggish and overall growth in 2016 was slower than in the previous year. A key reason for this can be found in the uncertain economic and political times we are experiencing; with consumers being much more cautious about how they spend their money.

“Over the next year, retailers will be faced with the challenge of creating real growth in a climate of increasing inflationary pressures. Data analytics could prove as a great asset to predict customers’ behaviour, analyse trends and forecast peak store visiting hours. In addition, real-time data can empower retail attendants with insight into their customers’ shopping preferences, enabling them to suggest and upsell items to customers based on their preferences.”

Samuel Tombs Chief UK Economist Pantheon Macroeconomics said: "The prospects for consumer spending in 2017 continue to look bleak, given that households’ real incomes will stagnate due to a toxic combination of rising inflation, a tougher fiscal squeeze and slower job gains.”