According to the latest data from BRC-KPMG, total (online and off) UK retail sales increased by +1.7% in December, against a growth of +6.9% in December 2022.
Non-food sales saw a YoY decline – sales on non-food products online decreased by -0.8% in December.
The proportion of non-food items bought online (penetration rate) increased to 36.8% (up 0.6% YoY). Furniture ranked ninth of 10 categories for online sales growth, down from 2nd place in December 2022.
Total UK retail sales increased by +3.6% YoY in 2023, with non-food sales declining by -0.1%.
Helen Dickinson OBE, chief executive of the British Retail Consortium (BRC), says: “The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending.
"The post-Christmas sales were unsuccessful in enticing spend in areas such as furniture and homeware, with households remaining cautious about making larger purchases. Sales saw a slight uptick in the week leading up to Christmas as consumers scrambled to purchase last-minute gifts, particularly online, due to the wet weather."
Paul Martin, UK head of retail at KPMG, adds: “The festive feel-good factor was lacking this year as many retailers faced a disappointing December with sales growth only up +1.7% on 2022.
"Online sales remained in negative territory, although the decline was weaker than seen in recent months with sales down nearly -1% on last year.
“Retailers rolled out promotions that lasted longer and were deeper than last year, and higher promotional activity amongst supermarkets saw grocery price inflation fall at its fastest rate on record in December. Whilst promotions are margin dilutive, retailers have done some great work in re-engineering supply chains to make them more cost effective, which has given more room to push ahead with discounting, and given the current environment, this is likely to stay with us for a while.
“Despite falls in inflation, an upcoming cut in national insurance rates, and some consumers having more money in their pockets this Christmas than last, the constant drip of economic challenges they’ve faced over the last two years has finally come home to roost. As we start a new year, cautious consumers are battening down the hatches and retailers can expect to see significant downward pressures on demand in the opening months of this year, which will ease off by spring if the economic conditions continue to improve and confidence slowly returns.”
