Retailers in the U.K. had a poor showing during the holiday shopping season; The Financial Times reported that despite steep price cuts, retail sales had their worst performance since December of 2008.
Citing retail sales data compiled by KPMG and the British Retail Consortium, The Financial Times reported sales were flat in December compared to a 1.4 percent increase in the year-ago December. That, noted the report, was the worst performance in a decade. The report noted that while the data doesn’t break out which retailers contributed, analysts think it skews more toward physical retailers and doesn’t include data from the likes of eBay and Amazon.
“Squeezed consumers chose not to splash out this Christmas, with retail sales growth stalling for the first time in 28 months,” said Helen Dickinson, BRC chief executive, in the report. Meanwhile, Paul Martin, head of U.K. retail at KPMG, told the FT that attempts by the retailers to boost sales via discounts weren’t enough to get consumers shopping.
The paper pointed to comments on the part of U.K. retailers Thursday (January 10) as further evidence of the pain the U.K. retail market is dealing with. Take retailer John Lewis, for one example, which said it may have to get rid of its profit share for its staff for the first time after saying profits would be a lot lower this year, according to the FT. “Two main factors are affecting the retail sector — oversupply of physical space and relatively weak consumer demand,” John Lewis chairman Charlie Mayfield said in the report. For the seven weeks leading up to January 5, sales at John Lewis stores increased 1 percent, noted the report.
Meanwhile, Marks and Spencer said same-store sales came in 2.2 percent lower than last’s year holiday season, with lackluster sales of clothing and home goods weighing on results. The decline in those two categories was somewhat offset by better than expected performance in the food category, reported the FT. The paper noted that for the 13 weeks ending on December 29, same-store clothing sales were down 2.4 percent while food saw a 2.1 percent decrease. Other U.K. retailers to warn of a challenging environment include Tesco, which had a strong performance in the U.K., and Debenhams.