The vast majority of retailers (85 per cent) reported positive
like-for-like sales figures for the Christmas 2009 trading period,
according to analysis by business advisory firm Deloitte.
On average, the retailers surveyed by Deloitte reported
like-for-like increases of 5.9 per cent, with clothing and footwear
retailers posting the strongest figures, increasing sales by 10.3
per cent.
Department stores saw a 7.1 per cent increase, with homeware
(6.2 per cent), food and grocery (5.4 per cent), health and beauty
(6.6 per cent) and electrical retailers (3.1 per cent) all enjoying
sales growth. However, games, books, music and video retailers
didn't fare as well, reporting a 6.1 per cent fall in takings
during the festive season.
Jane Whitlock, consumer business partner at Deloitte in
Birmingham, said on the face of it, Christmas 2009 had been
remarkably successful for many retailers.
"Against a backdrop of continuing economic uncertainty, to find
almost nine out of ten retailers increasing their like-for-like
sales is great news," she said.
"However, there is an underlying story here which tells a
different tale. 2009 was an unusual year in recent economic
history. The corporate sector was hit hard whilst the consumer
remained largely insulated. The retail sector saw a high number of
retail administrations with a significant proportion of those
businesses ultimately disappearing from the high street. We
estimate that the combined sales of these retailers were around
£9 billion. This spend has since migrated elsewhere, to those
stronger retailers that remain on the high street.
"This means that whilst some retailers are reporting strong
growth, to a certain degree they are doing so by eating up their
former competitors' share of the retail cake. The cake itself is
not getting much bigger though."
Ms Whitlock said 2009 saw consumer spending hold up pretty well
as record low interest rates reduced mortgage costs. However,
she said that 2010 presents a number of obstacles to this
continuing, such as higher taxes and larger National Insurance
contributions.
"As we look to the medium term, it is clear that the next
Government will take steps to tackle the public finances. These are
likely to be a combination of spending cuts and tax increases and
it is inconceivable that over the coming years, consumers will not
be impacted," she said.
Ian Geddes, UK Head of Retail at Deloitte, said: "All of these
factors suggest that demand will remain weak in the UK for the
foreseeable future. It is important that retailers and other
stakeholders in the industry do not interpret these figures, and
the other recent data from the ONS and BRC, as signs of a strong
and sustainable consumer recovery.
"However, the consumer has been remarkably resilient so far in
this downturn and with the total UK retail market worth in excess
of £285bn, there will continue to be success stories. Fashion
had an excellent Christmas and the value sector has grown at
tremendous pace recently and still has some way to go. Online
retailing is also a star performer and we would expect to see
further growth in this sector over the coming years."