The retail sector as a whole suffered its worst annual sales performance on record in 2020 after the spike in online sales was not enough to offset the closure of non-essential shops during lockdowns.
Data from the BRC-KPMG Retail Sales Monitor shows that whilst annual food sales grew 5.4% year-on-year, non-food fell about 5% with fashion, lifestyle and homeware retailers hit the hardest. The decrease in sales in physical non-food stores was even higher – a 25% drop as many consumers stayed away from the high street.
This meant total sales for 2020 across the industry were down 0.3% – the worst performance since the BRC began collating the figures in 1995.
In December, total retail sales increased by 1.8% – a pick up from November’s near-stagnation, but well below the 4.9% rate recorded in October. The BRC said there was a rise in the purchase of food-based gifts at Christmas as many shoppers bought what they could from shops that remained open.
December saw the highest-ever festive spending in the grocery sector as supermarkets continued to benefit from increased food & drink consumption at home during the pandemic.
Helen Dickinson, Chief Executive of the BRC, highlighted that many non-food retailers are struggling to survive and called on the government to provide fresh financial support for the sector. She said: “To avoid the unnecessary loss of shops and jobs Government should announce an extension to business rates relief for the worst-affected businesses as soon as possible. With many retailers making decisions over their future, the Government must act decisively.”
Paul Martin, UK head of retail at KPMG, added: “Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street and conditions will continue to be challenging as we enter another national lockdown. Consumer behaviour will also continue to evolve and retailers must embrace the changes if they are to hold on to hard-won customers and generate profitable sales.
“Looking ahead, fortunes will be mixed but pent up savings and a successful vaccine rollout will help support recovery in the retail sector later in the year. Retailers will also be hoping that the reopening of high streets and shopping centres will see a return to more normal levels of footfall.”
