U.K. Stores Set for Tough 2013 After ‘Underwhelming’ Holiday

Christmas was “underwhelming” for U.K. retailers with sales barely rising and the outlook for 2013 is little better, according to the British Retail Consortium.

Sales at stores open at least a year gained 0.3 percent in December from a year earlier, the worst performance since 2010, when snowy conditions deterred shoppers, the lobby group said today in a statement. Total revenue climbed 1.5 percent, but would have fallen excluding buoyant online revenue, BRC Director General Helen Dickinson said. Web sales climbed 18 percent.

Britons held off making holiday purchases until the last minute in order to find discounts, and overall shopper numbers were “disappointingly low,” the BRC said. U.K. consumer confidence fell in December as optimism about the outlook for the economy plunged, according to GfK NOP Ltd., while food and fuel inflation is weighing on household budgets.

“The sheer endurance test of a marginal, if any, growth environment is making it very, very difficult for retailers,” Dickinson said. The BRC expects “more of the same” in 2013.

Some retailers had a better Christmas than others, the BRC said. John Lewis Partnership Plc said last week that department- store sales rose 15 percent over the Christmas season. Smaller competitor Debenhams Plc (DEB) today reported a 2.9 percent gain in 18-week same-store revenue, though lowered its margin forecast after it stepped up discounting.

Holiday Discounting

William Morrison Supermarkets Plc yesterday reported a worsening sales decline as the growth of discounters such as Aldi and the lack of an online offering led to an erosion of the grocer’s market share.

The amount of holiday discounting was the same as the prior year, though the depth of promotions was shallower as retailers planned more cautiously and had less inventory, the BRC said.

The Internet accounted for about 20 percent of retail sales last month, up from a typical level of about 12 percent, as shoppers bought gifts for overseas relatives, and took advantage of improved delivery times and in-store collection, the BRC said. Still, that wasn’t enough to offset reduced shopper numbers in all but the final week of the month, it said.

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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