(Editor: Leona)

UK retail sales declined by 0.4%, on a like-for-like basis from December 2013, when they had increased 0.4% on the preceding year, finds the latest BRC-KPMG Retail Sales Monitor.

On a total basis, sales were up 1%, against a 1.8% rise in December 2013 – the slowest December growth since December 2008.

However, Furniture closed 2014 with success as it held its top rank for growth on a 12-month rolling basis, despite the GfK’s Climate for Major Purchase Index edging down a point to -1 in December. Meanwhile, the Home Accessories category was in the top five performers in December. Christmas assortments did better than Cooking & Dining, but both segments performed well. House Textiles was the fastest growing of the home categories in December, driven by bedding.

Adjusted for the BRC-Nielsen Shop Price Index, total growth was 2.6% (rounded), matching the December 2013 level, which was the highest since December 2009.

The performance of non-food categories was helped by the cyber-week and the end-of-season sales. Online sales of non-food products in the UK grew 7% in December versus a year earlier, when it had grown 19.2%. The non-food online penetration rate was 17.0%, up from 16% in December 2013.

Helen Dickinson, director general, British Retail Consortium (BRC), says: “The figures for December show that the British public were in a shopping mood with total sales up 1% on the same period last year. The Black Friday feeling continued into early December as customers bagged great deals on their Christmas gifts. The Boxing Day and end of season sales also contributed to December’s positive performance.

“It’s also worth noting that this has been the best month for food sales since Easter, with many of us opting increasingly for premium ranges for our festive fare.

“It’s clear that targeted discounting has worked for the UK’s retailers – prices have been cut just enough to encourage customers through the doors but not so much that sales growth has been completely choked off. In one of the most fiercely competitive retail environments in recent years, retailers will be encouraged by the fact their strategy for December appears to have paid off.”

David McCorquodale, head of retail, KPMG, comments: “Extensive discounting disrupted the timing and rhythm of Christmas spending. Between Black Friday and Boxing Day retailers and consumers engaged in a three-week dance, each waiting for the other to take the lead, and as a result sales suffered.

“It’s now clear that Black Friday did pull festive sales forward into November, and this created a challenging lull in spending with consumers waiting for future bargains. This situation did not reverse until the week of Christmas. The launch of Boxing Day sales, mixed with new season full price stock, saw some phenomenal spending, with fashion retailers achieving double-digit growth.

“This difficult stop/start sales environment has been undoubtedly challenging, but most retailers have managed to achieve a flat, but respectable, sales performance this Christmas – time will tell on margins.

“2015 is likely to bring more of the same, and the big four grocers have already signalled they will cut prices to secure sales. Non-food retailers will fare better, but whilst consumer confidence remains fragile, these too are vulnerable to shocks, be they political or economic.”