Retail sector suffers worst year in quarter of a century

British Retail Consortium says last year marked first annual sales decline since 1995

High Street - WD

Retail sales in the UK fell for the first time in a quarter of a century last year, the British Retail Consortium has said, as changing consumer habits and political uncertainty left shoppers “more cautious and more conscientious”.

In what This is Money calls “a sign of the trouble affecting the high street”, the UK’s leading retail industry body found that total sales fell 0.1% last year, marking the first annual sales decline since 1995.

Perhaps most worrying for retailers was news that sales in the run-up to Christmas had been particularly weak, falling 0.9% in November and December, while a separate report from Barclaycard found a rise in consumer confidence had failed to boost festive spending.

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Helen Dickinson, chief executive of the BRC, laid the blame partly on political turmoil in 2019, saying: “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”.

However, “retailers also faced challenges as consumers became both more cautious and more conscientious as they went about their Christmas shopping,” she added.

The figures “shine a light on a terrible year for the high street” says The Guardian, during which thousands of stores have closed and 140,000 shop staff have lost their jobs. According to Deloitte's insolvency figures, 249 large retailers have fallen into administration in the last two years.

The BBC points to rising costs, “with business rates, rents and wages taking a bigger chunk of retailers' expenditure, and with footfall in decline, many shops are simply too big and frequently in the wrong locations”.

High street retailers are also under pressure from changing shopping habits, with customers spending one in every £5 online, says the broadcaster.

“Despite all the gloom, the high street isn’t quite the bloodbath that the likes of the BRC would have us believe,” says The Daily Telegraph’s Ben Marlow, who calls the BRC’s claims’ “suspect”.

He cites Tesco and Marks & Spencer as high street stalwarts whose bosses have recently made more positive noises about the future.

The same cannot be said of John Lewis, which reported a fall in festive sales and hinted it may not offer a staff bonus for the first time in 67 years.

The poor performance of the flagship high street store has already cost the job of managing director Paula Nickolds but cancelling staff bonuses “would be a watershed moment”, says Marlow, noting that John Lewis has only ever suspended it once before, during the Second World War.

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