2020 UK retail sales hit 25-year low, even after a stronger Christmas

By

Nigel TAYLOR

Published
Jan 12, 2021

We all know retail was a disaster last year. But just how bad was it, given that e-commerce performed well? The worst in 25 years, according to The British Retail Consortium (BRC) and KMPG.

Not even a stronger performance in December and a boom year for e-commerce failed to stop UK retail recording its worst yearly decline since 1995.

Total retail sales for 2020 fell 0.3% as most stores were forced to close during various lockdowns as the Covid-19 pandemic mostly crippled physical retail. While food sales growth rose 5.4% on 2019, non-food sales, including online, fell about 5%.

But it was sales of non-food items in physical stores that were hit the hardest. They collapsed 24% last year as stores deemed non-essential, mostly offering fashion, lifestyle and homewares, saw the worst of the crisis-linked downturn.

And the overall figure could have been worse had not brief relief in December seen sales last month rise 1.8% year-on-year.

But what was still bad for many was also a boon for others. Online non-food sales were up 44.8% last month as consumers ordered more Christmas presents online with many stores closed due to local restrictions.

"Covid-19 has led to 2020 being the worst year on record for retail sales growth," confirmed BRC chief executive Helen Dickinson.

"Christmas offered little respite for physical non-food stores, as many shops were forced to shut during the peak trading period."

Paul Martin, UK head of retail at KPMG that compiled the figures, said of the December performance: "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.”

And looking forward, Dickinson again called on the government to provide fresh financial support for the retail sector: “With shops still closed for the foreseeable future, costing stores billions in lost sales, many retailers are struggling to survive.”