High street suffers worst December retail sales on record as online growth slumps
December retail sales were negative for the first time on record in 2020, with online purchases slumping to the lowest level since the pandemic began, in the latest blow to the beleaguered UK high street.
Online sales were at their lowest level since March, increasing by 62 per cent on the previous year, and were unable to mitigate against the impact of physical store closures.
The latest analysis, published this morning, showed that total like-for-like sales declined 1.6 per cent last month, from a strong base of 6.6 per cent growth in December 2019.
The crucial trading month got off to a strong start, with sales rising 11.2 per cent in the first week of December and 6.2 per cent over the following seven days, according to research by BDO.
However, sales tumbled 11.5 per cent in the third week and 23.18 per cent in the fourth as coronavirus cases surged and further lockdown restrictions were implemented across the country.
Separate research by the British Retail Consortium showed that footfall was down 46.1 per cent in December compared to 2019 levels, but was up 19.3 percentage points on the previous month.
The research also showed that shoppers were not holding out for January discounts, as there has not been a bounce back in sales in the first week of the new year.
BDO head of retail and wholesale Sophie Michael said: “Early January spending figures suggest shoppers weren’t simply waiting for discounting, but instead stopping discretionary spend altogether as the nation hunkers down for a long winter lockdown.
“Unlike the November lockdown that had a finite ending with Christmas in sight, the current forecast remains much gloomier for retailers, as they try to hold on until the vaccination programme can reopen the economy, which may leave many with high levels of unsold winter stock.”
The fashion and lifestyle sectors continued to suffer in December, falling by 6.2 per cent and 5.4 per cent respectively, while homeware sales continued their upward trajectory, growing 29.3 per cent.
“It is clear that there are retailers in urgent need of further support to survive this latest lockdown,” Michael added.
“While there is no doubt that we will see more retail casualties, there will also be those that ride this storm and will find greater opportunities as discretionary spend returns and recovery begins.”