British retailers see worst year on record in 2019

UK retailers saw sales fall last year, as uncertainty over Brexit and a slowing economy hit consumers

British retailers suffered their worst year on record in 2019, thanks to a combination of uncertainty over the UK’s departure from the European Union, plus a snap general election and a slowing economy, according to a report.

The British Retail Consortium said total sales for 2019 fell by 0.1 percent, compared with an increase of 1.2 percent in 2018, making last year the worst since its records began.

Black Friday has now overtaken Christmas as the busiest shopping point in the year, the BRC said. But even still, British shoppers held on tight to their wallets.

On a total basis, sales rose by 1.9 percent in December, versus 0.0 percent in December last year. When taken together with November, when Black Friday sales kick off, sales fell 0.9 percent compared with the same period last year, the BRC said.

“Looking forward, the public’s confidence in Britain’s trade negotiations will have a big impact on spending over the coming year. There are many ongoing challenges for retailers: to drive up productivity, continue to raise wages, improve recyclability of products and cut waste,” said Helen Dickinson, chief executive of the BRC, which has membership of over 5,000 businesses that employ over 1.5 million people.

Consumer spending accounts for around three-quarters of total UK economic activity. The British Chambers of Commerce reported last week that economic activity “limped” to the end of 2019, as a broad-based slowdown continued.

Britain is scheduled to leave the EU on January 31, having delayed its decision to do so twice last year, which weighed heavily on consumers and businesses alike.

The terms of any future trading relationship with the EU are not yet clear, while Conservative Prime Minister Boris Johnson has said he intends to make good on his campaign pledge ahead of the December 12 election to “get Brexit done”.

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Paul Martin, UK head of retail at consultancy KPMG, said there were some positive elements to the report, but overall, the picture remained fairly bleak.

“At first glance retailers’ relentlessness paid off in December, with total sales up 1.9 percent. However, the later timing of Black Friday will have skewed the outcome. If looking at November and December combined, sales actually declined by 0.9 percent,” he said.

“Consumers clearly favoured logging on to walking in, with online sales up 12.8 percent in December. However, if taking a two month average, growth online was clearly muted at only 2.6 percent,” he added.

FURTHER READING: Uncertain future for UK economy

https://currency.com/news/2020/01/02/uncertain-future-for-uk-economy

FURTHER READING: UK labour market freezes

https://currency.com/news/2019/12/06/uk-labour-market-brexit-uncertain-freezes

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