Festive success for UK retailers but significant head winds in 2022

Despite the recent Omicron outbreak, UK retail sales held up through December, as many people chose to buy online rather than travel to nearby high streets and shopping centres. according to research from the BRC and KPMG.

For 2021 overall, total sales increased 9.9% compared with 2020. Food growth was 3.1% and non-food growth 15.6% for the year.

“Retailers did well to weather the challenging trade conditions, with retail sales for 2021 up on both the previous year and compared to pre-pandemic levels,” says Helen Dickinson, Chief Executive at British Retail Consortium.

She adds: “Continuing a trend throughout the pandemic towards online shopping, 2021 saw a double digit rise in non-food online sales, a testament to retailers’ huge investments in their online platforms.”

“However, retail faces significant head winds in 2022, as consumer spending is held back by rising inflation, increasing energy bills, and April's national insurance hike. It will take continued agility and resilience if they are to battle the storm ahead, while also tackling issues from labour shortages to rising transport and logistics costs.”

December

Paul Martin, UK Head of Retail at KPMG, comments: “Following a strong November, retail sales continued to grow in December, increasing by just over 2% compared to 2020, although the spread of the Omicron variant and updated government guidelines slowed spending during the final weeks of the year.”

“Apparel and jewellery continued to dominate Christmas gift buying at the tills, whilst spending on food and drink was solid, although it slowed to just over 1%.”

He concludes: “Consumers continued to head to the high street for their festive gifts, determined to secure the presents they wanted and not leaving online deliveries arriving on time to chance.”

“Footwear was the only online category to see mild growth as overall online sales continued to decline, falling by over 8% in December albeit against strong comparators in 2020.

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