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Daily Mirror
Daily Mirror
Business
James Andrews

Shops suffer worst annual performance on record despite Christmas surge

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

Figures from Barclaycard show online grocery spending surged by 88% as households stocked up on Christmas food, while specialist retailers - including toy shops, jewellers and gift shops - recorded spending growth of 61.9% online.

But that wasn't enough to make up for falls over the past 12 months.

The latest BRC-KPMG retail sales monitor shows total sales fell 0.3% for the year against 2019 - the biggest worst year-on-year drop since records began in 1995.

Helen Dickinson, British Retail Consortium chief executive, said: "Covid has led to 2020 being the worst year on record for retail sales growth.

"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."

Enforced closures, job losses and reduced incomes meant people spent less (Getty Images)

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.

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.

The move to home shopping saw online spending rise (Getty)

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."

And not even Christmas helped everyone.

Fuel spending fell by 20.7% annually as many families' festive plans to visit loved ones were scrapped, Barclaycard said.

The hospitality sector was also hit hard, with steep spending declines at bars and pubs (down by 71.4% annually) and restaurants (a 65.4% decline).

Raheel Ahmed, head of consumer products at Barclaycard, said changing coronavirus restrictions continue to have an impact on spending habits.

"As a result of further restrictions, online grocery spend surged and fuel declined as the majority cancelled their plans and stayed home for the holidays," he said.

"Additionally, many still continued to support their local shops where possible, spending more time in their local community."

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