The UK retail sector in 2019 suffered its worst annual performance on record after political uncertainty depressed festive season sales, according to industry data.
The value of retail sales fell 0.1 per cent in 2019, down from 1.2 per cent growth in 2018 and marking the worst year since comparable data were first gathered in 1995, the British Retail Consortium in collaboration with advisory firm KPMG reported on Thursday.
The annual figure is the result of subdued growth throughout the year that ended with a contraction in the last quarter. In the last three months of 2019, sales fell by an annual rate of 0.4 per cent, dragged down by a 1.4 per cent drop in non-food spending.
The BRC data are released ahead of official retail sales spending and mark the first measure of shoppers’ enthusiasm during the festive season.
With the increased popularity of the discount period of Black Friday, the individual months of November and December have become an unreliable metric of the trend over the festive season. But BRC data show that over the two months combined, sales were down 0.9 per compared with the same period last year.
“Twice the UK faced the prospect of a no-deal Brexit, as well as political instability that concluded in a December general election — further weakening demand for the festive period,” said Helen Dickinson, BRC chief executive.
The consortium noted that in 2019 Black Friday overtook Christmas as the biggest shopping week of the year for non-food items for the first time.
Further evidence of shoppers’ reluctance to spend came from Barclaycard data, also released on Thursday, which showed consumer spending rising only 1 per cent, a rate below the pace of inflation — which indicates a contraction in real terms.
Despite the festive season, specialist shops such as those selling toys and computer games, recorded a 4 per cent decline, followed by clothing spend which was down 3.3 per cent, according to Barclaycard. The company claims it tracks nearly half of the nation’s credit and debit card transactions.
Barclaycard’s survey showed an uptick in shoppers’ confidence in December following the decisive election result, but “optimism hasn’t yet translated into high street sales”, said Esme Harwood, director at Barclaycard.
Earlier in the week, data from the Society of Motor Manufacturers and Traders showed car sales dropping 1.6 per cent in the last three months of 2019 compared with the same period of 2018, adding to fears that the sector’s resilience might have faltered at the end of the year, providing reduced support for a weakening economy.
Poor consumer spending data is further evidence of a weak end of the year for the UK economy after weak December private sector activity figures published this week.
