Bleak December sales could lead to a brighter outlook for retailers

The ONS December 2015 Retail Sales held little in the way of surprises for the warmest December since records began. However, our recent cold snap could help push sales throughout January as retailers look to shift their Autumn/Winter stock and also tempt customers with winter-warming food.

The key findings from the Retail Statistics showed:

• Compared with November 2015, the quantity bought in the retail industry is estimated to have decreased by 1.0%.
• When comparing the 2015 annual data with 2014, the quantity bought in the retail industry was estimated to have increased by 4.5%.
• Average store prices (including petrol stations) fell by 3.2% in December 2015 compared with December 2014, the 18th consecutive month of year-on-year price falls.
• The amount spent in the retail industry decreased by 1.0% in December 2015 compared with December 2014 and decreased by 1.4% compared with November 2015.
• The value of online sales increased by 8.2% in December 2015 compared with December 2014 and decreased by 5.2% compared with November 2015.

According to Phil Mullis, partner and head of retail and wholesale at top-20 UK accountancy firm, Wilkins Kennedy, the 1% quantity decrease from November is likely to have been caused by people taking advantage of the long-tailed Black Friday weekend and preparing for Christmas earlier than usual. It was interesting to note that although online sales were down in December compared to November, the year-on-year trend continues on an upward trajectory.

“One challenge for retailers in 2016 will be to work on their online offering, whilst also reviewing the performance of their physical stores” Phil commented. “January is usually the month for review and sadly we have seen one administration, the shoe discount chain Brantano. In addition, menswear retailer, Blue Inc., closed a number of its stores and is looking to invest in its online offer. “

“However, there could be warmer climates the horizon – for retailers at least! Whilst the colder weather takes hold, it looks as though consumers will be fighting the cold and snapping up Autumn/Winter stock, which will no doubt help bring a boost to the January sales.”

Phil concluded: “There continues to be price deflation, mainly in fuel and food, which may be good for quantity but not so good for amounts spent. As ever, it will be interesting to see what the figures have in store next month!”