The UK retail industry suffered its worst year on record in 2019, with sales falling for the first time in 24 years.
The British Retail Consortium (BRC)/KPMG Retail Sales Monitor showed a 0.1 per cent decline in total sales last year compared with growth of 1.2 per cent in a tough climate in 2018. The BRC said the performance was the weakest since comparable records began in 1995.
The downturn was influenced by a 0.9 per cent fall in sales in the crucial final two months of the year when many retailers get most of their annual profits. That decline was partly driven by online sales rising by 2.6 per cent in November and December. Non-food sales also fell by 1.4 per cent compared to the same period in 2018.
The BRC also revealed that Black Friday week has now overtaken the week before Christmas as the biggest shopping period of the year for non-food items.
The findings echo reports from retailers and data providers which have suggested major supermarkets as well as bricks and mortar stores struggled to make much headway following a tough few years.
The state of the high street
A decline in consumer sentiment combined with rising costs on rents, business rates and wages has pushed 249 large retailers into administration over the last two years, according to Deloitte’s insolvency figures.
This has included Mothercare, Forever 21 and Bonmarche, along with Mamas & Papas and Jack Wills, which were sold in pre-pack administrations. In December 2019, a total of 11 companies folded, up from seven the previous year.
In addition, retailers including Topshop, Dorothy Perkins and Miss Selfridge owner Arcadia, HMV, Laura Ashley, Bathstore, LK Bennett and cake and cafe group Patisserie Valerie have closed a large number of outlets as part of a restructuring.
More than 12 per cent of stores now stand empty, according to analysts at Local Data Company, compared with 11.5 per cent a year ago.
BRC chief executive Helen Dickinson said: “2019 was the worst year since our records began in 1995 and the first year to show an overall decline in retail sales. This was also reflected in the shop closures and job losses.
“Twice the UK faced the prospect of a No Deal Brexit. Consumers became both more cautious and more conscientious as they went about their Christmas shopping.
“It is essential the Government makes good on its promise to review, and then reform, the broken business rates system.”
A shift in consumer behaviour and preferences?
Separate data from Barclaycard about the UK’s retail industry was more upbeat, suggesting consumers prioritised trips out with family and friends rather than shopping in the build-up to Christmas.
The data indicated a 19 per cent rise in cinema ticket sales, 11.7per cent increase in spending in pubs and 12.5 per cent jump in takeaway orders, while spending on clothing, toys and computer games contracted.
Esme Harwood, director at Barclaycard, said: “Consumer confidence is finally improving after a long period of political uncertainty. This optimism hasn’t yet translated into high street sales, but spending on experiences continues to grow, with Brits enjoying box office hits and trips to the pub.
“While consumers remain reluctant to spend on big ticket items, the mood seems to be changing.”