Shoppers shrug off Omicron concerns as retailers record strong December sales growth
Shoppers shrug off Omicron concerns as retailers record strong December sales growth
- December retail sales record tenth month of consecutive growth
- Total like-for-like sales up by over 21%
- Sales grew throughout “Golden Quarter” despite supply chain issues and stock shortages
The rapid growth in COVID-19 cases in December caused by the Omicron variant did little to dampen consumer enthusiasm for Christmas shopping, new figures by accountancy and business advisory firm BDO LLP reveal.
According to BDO’s High Street Sales Tracker (HSST), total like-for-like sales, combined in-store and online, increased by +21.4% in December from a base of -1.6% for the equivalent month in 2020.
Total non-store like-for-like sales increased by just 7.6%, compared to an increase of 62% in December 2020. However, this lower level of growth compared to last year reflects a reallocation of consumer spending from online channels - the only channels available during lockdown in 2020 - back to the high street.
In-store like-for-like sales saw substantial increases across all categories compared to December 2020. Despite slightly slower growth in the second and third weeks of the month, when concerns around the Omicron variant started to increase, the sector finished the month with an exceptionally strong week, with like-for-like sales up +60.9%.
Sector Results
Fashion saw the biggest growth with total like-for-like sales increasing by +26.3% for the month, from a base of -6.2% for the same time last year. The sector has maintained consistently strong growth throughout the ‘Golden Quarter’ (October, November and December), reflecting pent-up demand for winter clothing that consumers held off purchasing last year as they anticipated future lockdowns.
Total like-for-like sales in the lifestyle sector increased by +27.9% in December, from a base of -5.4% for the equivalent month last year. This is the tenth month of positive total like-for-like sales for the lifestyle sector, which saw growth hit +91.4% in the week leading into Christmas.
Homeware total like-for-like sales rose by just +7.4% in December, from a strong base of +29.3% the same month last year. While levels of growth in the homeware category have not always been consistent, this is the twentieth consecutive month of positive like-for-like homeware sales.
Sophie Michael, Head of Retail and Wholesale at BDO LLP, said:
“Observers of the UK retail market may be surprised to see retailers finish the ‘Golden Quarter’ with such a strong set of results, given the volatility and uncertainty in the market. Supply chain issues, staff and stock shortages and – in December – concerns around the Omicron variant threatened to limit retailers’ ability to serve their customers. However, after almost two years of operating in this environment, retailers have developed significant capacity for resilience and adaptation that ensures they can continue to operate successfully in challenging trading conditions.
“However, this strong performance depends on consumers maintaining high levels of spending while facing further headwinds of inflation, rising energy bills and potential increases to interest rates. The uplift in the National Living Wage and National Insurance, as well as rising energy costs, will also put serious pressure on retailers’ bottom lines. Retailers may find they struggle to attract consumer spending and to maintain low prices, particularly in fashion and footwear, as these pressures intensify this year.
“Retailers will now need to reinforce the resilience they have developed over the past two years if they are to survive further shocks to the system and see the strong growth of 2021 continue in 2022.”
Notes to editors
Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.
Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy.
We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.
BDO LLP
BDO LLP operates in 18 offices across the UK, employing 6,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.
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The BDO global network provides business advisory services in 167 countries, with 97,000 people working out of 1,728 offices worldwide. It has revenues of $11.8bn.
Contacts
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