Published On: Thu, Jan 10th, 2019

Debenhams and M&S sales FALL as UK high street suffers WORST Xmas since financial crisis

In the latest dent for British retailers, Debenhams recorded a dip of 3.4 percent in like-for-like sales in the six weeks to January 5. In the UK, sales were 3.6 percent lower due to weaker footfall. Marks and Spencer said like-for-like clothing and home sales dropped 2.4 percent over the 13 weeks to December 29 while comparable food sales fell 2.1 percent. In other worrying news for the UK high street, both John Lewis and Halfords issued a profits warning as the pair join other retailers in battling tough trading conditions.

John Lewis warned its annual staff bonus is under threat as it braced for “substantially lower” profits amid slower sales growth.

While Halfords said revenue was down 1.7 percent on a like-for-like basis during the 14 weeks to January 4.

But one retailer had something to celebrate this morning as Tesco unveiled its best set of Christmas trading figures in nearly a decade.

The grocery giant was toasting a 2.2 percent rise in UK like-for-like sales in the six weeks to January 5.

On a wider scale, damning new figures revealed how total retail sales growth in the UK flatlined in December, marking the worst festive season performance in a decade.

Total retail sales showed 0 percent year-on-year growth in December, the British Retail Consortium (BRC)-KPMG retail sales monitor said.

UK retail sales decreased by 0.7 percent on a like-for-like basis from December 2017.

BRC chief executive Helen Dickinson said: “Squeezed consumers chose not to splash out this Christmas, with retail sales growth stalling for the first time in 28 months.

“The worst December sales performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger.”

She added: “Retailers are facing up to this challenge but are having to wrestle with mounting costs from a succession of government policies – from the apprenticeship levy, to higher wage costs, to rising business rates.”

Paul Martin, UK head of retail at KPMG, said: “Retailers experienced little festive cheer this year, with total sales in December delivering zero growth on last year.

“This comes despite some retailers desperately attempting to generate sales through slashed pricing, which has seemingly not been enough to encourage shoppers.

“Growth in food did provide a glimmer of hope, being among the few categories to notice an uptick.

“However, the continued contrast in performance between the high street and online remained evident in December – albeit 2018 did also see a continued slowdown in online retail sales.”

Meanwhile, a separate report from Barclaycard said consumer spending grew 1.8 percent year on year in December, the lowest rate of growth seen since March 2016.

Data from Barclaycard showed that essential spending growth dipped to just 0.6 percent – the lowest figure recorded since July 2016 – caused by a contraction in supermarket spending.

Esme Harwood, director at Barclaycard, said: “Growth in consumer spending dropped to its lowest level since 2016 and represents a decline in real terms.”

She said consumers “remain cautious amidst ongoing economic uncertainty”.

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