Economy

Christmas period proves testing time ahead says BRC chief

Consumers have been really astute this festive period, according to the BRC chief, and waited until the last minute to make festive purchases, cutting out unnecessary spending in the hunt for bargains. And, with the post-Christmas sales all but over, Helen said that retailers would be trading in a largely “no growth” environment moving into 2013.

“As we look to the new year, utility prices are likely to edge up inflation and people are keen to continue paying down their debt, which means the amount of money they have in their pockets will remain under pressure.

“So, 2013 will be characterised by more of the same and there’s every sign that the on-going endurance test for retailers of trading in a largely no-growth environment is likely to continue well into next year.”

The festive period afforded a weekend of shopping just before Christmas day, and the way the dates fell had a significant impact on this year’s figures.

“As always, there was a last minute Christmas rush. It came later this year because hard-pressed customers remain cautious, wanting to hold out for bargains, and there was a final full shopping weekend immediately before Christmas that the calendar didn’t provide last year.

“There are big variations in individual retail performances but, when the final sums are done, total spending is likely to be up modestly on last year, though only broadly in line with shop price inflation.

The BRC chief did point out, however, that it wasn’t all bad, as some sectors fared better than others over Christmas. Retailers offering online sales were given a boost as that sales sector saw further growth.

“Online sales growth accelerated as we took advantage of the investment that many retailers have made in giving us the flexibility we now demand around delivery options like click-and-collect and security,” said the director general.

“We now feel much more comfortable about putting our credit card number into our mobile phone, but overall this channel represents just over 10 per cent of total retail sales.

“Sales have not collapsed but the pressure is coming from adapting to conditions that consistently deliver minimal year-on-year sales growth. There is only so much cost cutting and new efficiency retailers can achieve.”

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