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Retailers suffer record sales slump in 2020 after shops shut doors

Henry Saker-Clark, PA City Reporter
·2-min read

Retailers suffered their worst annual performance on record in 2020 as a Christmas uplift failed to stop sales for the year slumping lower, according to new figures.

The latest BRC-KPMG retail sales monitor revealed that total sales fell 0.3% for the year against 2019, representing the worst year-on-year change since the survey started in 1995.

The slump was driven by a 5% plunge in non-food sales as fashion, lifestyle and homeware retailers were impacted by the enforced closure of non-essential stores for large parts of the year.

“Covid has led to 2020 being the worst year on record for retail sales growth,” said Helen Dickinson, chief executive of the British Retail Consortium (BRC).

“Physical non-food stores – including all of non-essential retail – saw sales drop by a quarter compared with 2019.

“Christmas offered little respite for these retailers, as many shops were forced to shut during the peak trading period.”

However, food sales increased by 5.4% during the year as shoppers flocked to supermarkets and increased online food shopping to ensure they were stocked up during the pandemic.

In December, total retail sales increased by 1.8% as shoppers spent more in the run-up to Christmas.

Like-for-like sales for the month were up 4.8% as overall shop takings were still impacted by restrictions and temporary closures.

Online non-food sales jumped by 44.8% in December, according to the new figures, as a higher proportion of shopping took place online.

Paul Martin, UK head of retail at KPMG, said: “In the most important month for the retail industry, there was some positive growth due to the ongoing shift of expenditure from other categories such as travel and leisure.

“Once again we saw big swings in the types of products being purchased and the channels used for shopping, with much of the growth taking place online where nearly half of all non-food purchases were made.

“Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street and conditions will continue to be challenging as we enter another national lockdown.”

Susan Barratt, chief executive officer at IGD, said: “December 2020 saw the highest ever festive spending in the UK food and grocery retail sector and was largely in line with the elevated trend through the year.

“Tightening restrictions across much of the country limited other sales channels and enabled supermarkets to get the full benefit of people celebrating with food and drink.”