Retailers are preparing for a flat trading year after like-for-like sales edged up just 0.3% in the critical December trading period, against a 2.2% increase in the same month the previous year.
Total sales for last month jumped 1.5% against December 2011, when they advanced 4.1%, according to the British Retail Consortium (BRC) KPMG Retail Sales Monitor.
Growth in online non-food sales slowed, rising 17.8% last month, compared with the 18.5% rise recorded in December 2011. However, the BRC said online played a “disproportionately” larger role this year in driving non-food sales.
BRC director-general Helen Dickinson said December delivered “very modest growth” and highlighted the importance of online shopping.
Dickinson explained that the sales pattern was very similar to last year but surged just before Christmas in week 52, as Christmas fell on a Tuesday and shoppers were able to take advantage of an extra weekend.
“Against the relentlessly tough economic backdrop and low expectations, these results are not a cause for celebration, but not a disaster either,” Dickinson said.
“Retailers will be hoping that a continuing boost from post-Christmas Sales events strengthens January’s figures but, unfortunately, there are few signs that their sense of ‘running fast to stand still’ is likely to ease off any time soon.”
She said as the underlying trend in the three-month sales average has remained flat, it is likely this will not change in 2013.
“It will be more of the same, highlighting what a challenging environment retailers are operating in.”
Meanwhile, footfall was “disappointingly low” in December this year as rain kept shoppers off the high street and the lure of convenience led people to spend online.
Breaking out the categories on a three-month average, food like-for-like sales grew 0.3%, while non-food edged up 0.1%.
The BRC said consumers were cautious not to overspend on food this Christmas.
Across clothing the colder weather boosted sales of outerwear. But 69% of fashion retailers started running Sales or advertising promotions two weeks before Christmas, with discounts of up to 70%, which may have helped drive sales across the category.
KPMG head of retail David McCorquodale said: “The stand-off between retailers and consumers looking for bargains and discounts continued throughout December and, while some retailers will report record Christmas sales, most will breathe a sigh of relief because it could have been much worse.”
Electricals sales were driven by “strong growth” of tablets, while earmuff headphones sold well and TV sales increased at their sharpest rate since the summer. Retailers reported a “positive effect” from the demise of electricals retailer Comet.
Distribution firm CitySprint recorded its busiest ever Christmas last month, as it made double the number of retail deliveries compared to year before, highlighting the popularity of online shopping.
In December CitySprint handled 250,000 retail deliveries. The company’s peak delivery day was December 18, although it said the number of deliveries remained high up until Christmas Eve.
CitySprint boss Patrick Gallagher said: “We’ve seen a phenomenal growth in online retail this Christmas, with those retailers that offer convenient delivery options benefiting the most from the increase. More and more consumers are now looking for retailers to offer more flexible delivery options, including later shopping window cut-off’s as well as evening, scheduled and same day delivery.”