8 Jan 2013

Retail boost ‘underwhelming’ but online sales surge

There was no Christmas boom for the British high street – but a new survey shows people have still been spending. Online stores have seen a huge leap in sales.

Sale sign in window (getty)

It was a dismal December for many British retailers, with plenty forced to discount goods well before Christmas in a vain effort to boost sales. But new figures from the British Retail Consortium show that Britons have not stopped flexing the plastic: they are just doing it online.

Overall, the sluggish trade on the traditional high street helped to make it an “underwhelming” month, with overall like-for-like sales barely managing to rise at all.

But the BRC said that shoppers appeared to be taking the easy route, tapping their credit card details into their computers or smartphones rather than braving the crowds, the weather and the queues.

There will be no boom, and it is likely more than a few will go bust. David McCorquodale, KPMG

The director general of the BRC, Helen Dickinson, said: “Many valued the ease and convenience of shopping online during the Christmas period. The surging popularity of tablets and smartphones giving even better access is a major factor.”

Unsurprisingly, many of the purchases were highly seasonal: coats and jumpers sold well, as did the all-in-one pyjama-style garments made popular by celebrities like Robbie Williams and Rhianna.

Christmas puddings and desserts were some of the best sellers, along with champagne and salmon, as normally prudent shoppers decided to splash out.

However analysts have warned this could mean sharp cutbacks in January, as consumers start getting their Christmas credit card bills. David McCorquodale, head of retail at KPMG, warned 2013 would bring more of the same challenges.

“There will be no boom, and it is likely more than a few will go bust,” he said.

Several retail giants have already announced their Christmas trading figures, and the ones which came off best benefited from a jump in online sales, unlike the supermarket chain Morrisons, which saw its performance outclassed by internet-savvy rivals.

But despite the air of uncertainty about this month’s spending levels, there is a more general mood of optimism about the economic future, according to a report by the British Chambers of Commerce.

Its quarterly survey of 7,662 businesses found many firms were more hopeful about the outlook ahead. The BCC brushed aside warnings of a triple-dip recession, insisting many sectors had improved their performance in the last three months of the year.

BCC chief economist David Kern said he expected a modest recovery in GDP this year and next, although warned that the government must do more to boost growth.

“The economic environment will remain challenging,” he said, “both globally and in the UK, with a prolonged period of below trend growth.”

And with many businesses planning to raise prices in the coming months, inflation also remains a keen concern. Not good news for the high street – or for Britian’s consumers.