Christmas 2009 saw twice as many retailers report like for like
sales increases over the festive period compared with 2008
Despite gloomy predictions, the festive season saw an excellent
recovery from the retail sector as 87% of UK retailers reported an
increase in like for like sales over the Christmas period for 2009,
compared with just 42% last year, according to Grant Thornton's
Review of Retail Christmas Trading Updates.*
Of particular interest is that the homeware and household sector
went from worst to best performing sector, indicating some
improvement in consumer confidence and a potential recovery in the
housing market. All retailers in this sector performed well
although the average increase in like for like sales of 7% failed
to fully recoup the average decline in sales of 11.3% recorded over
Christmas 2008. And in a mirror image of the results from last
year's survey the entertainment sector went from being the best to
worst performing sector this year.
"Most of the predictions relating to how UK retailers would perform
over Christmas were extremely pessimistic. However, the turnaround
in performance compared to Christmas 2008 is extremely marked,"
says David Bush, Retail Director at Grant Thornton.
"The majority of trading updates issued by UK retailers
throughout the earlier part of 2009 were relatively confident in
tone, the last quarter showing a particularly good performance and
therefore the relatively strong retail figures over Christmas
should be viewed as a continuation of a trend rather than a
"blip"', continues Bush.
"Many consumers clearly decided that they were tired of showing
spending restraint since 2008 and were determined to spend again as
long as the retailers proved persuasive enough, which they
generally did this Christmas," argues Bush.
Food and Drink retailers
Similar to previous years, this sector delivered a solid
performance. Whilst the average like for like growth in sales was
"only" 4.5%, the 2008 comparatives were generally strong. The sales
growth exhibited particularly by the supermarkets continued to be
driven by non-grocery sales. For example, J Sainsbury reported that
complementary non-food ranges' sales grew at four times those of
food ranges in the Christmas trading period. Tesco reported
strong sales growth in their clothing, toys and electrical
categories.
Internet shopping continues to grow
Internet shopping continued to increase in significance this
Christmas. 10 of the 37 retailers surveyed (27%) made direct
reference to the significant year on year internet sales growth
that they had achieved.
"There is still inevitable uncertainty of what this means for
the retail market over the next six months but what is
certain is that retailers have been playing safe and being overly
cautious in their predictions. Whilst the UK does still remain in a
recession and unemployment does continue to increase, many shoppers
are benefiting from historically low interest rates. Furthermore,
these figures show that if the brand and price are right, customers
are still willing to spend." concludes Bush.
For further information, please contact:
Suvra Datta, Grant Thornton Press Office, 0207 728 2375 or via
email on suvra.datta@gtuk.com
* The findings and conclusions contained in this survey follow
the analysis of 38 trading updates issued by UK retailers since
January 2010. We have focused, specifically, upon the key measure
of like for like sales increases posted over the crucial Christmas
trading period.