Christmas has been and gone but the repercussions are still being felt as retailers report on how they fared over the festive period. According to the British Retail Consortium the high street suffered the worst Christmas for a decade. December retail sales decreased by 0.7% on a like-for-like basis from December 2017. On the flip-side, online saw growth of 5.8% in December highlighting how consumers are increasingly shopping online at Christmas.
Overall though, “squeezed consumers chose not to splash out this Christmas with retail sales growth stalling for the first time in 28 months,” says Helen Dickinson OBE, Chief Executive, British Retail Consortium. “The worst December sales performance in ten years means a challenging start to 2019 for retailers, with Business Rates set to rise once again this year, and the threat of a No-Deal Brexit looming ever larger.”
Capgemini/IMRG reported a stalling of online growth towards the end of 2018 too. UK online retail sales growth hit an all-time low of just 3.6% year-on-year (YoY) in December. This figure finishes what was a challenging second half of the year. The Capgemini IMRG eRetail Sales Index recorded 16% (YoY) growth for online in the first six months of the year, followed by a decline to 8.4% (YoY) growth for the second half of 2018. Overall though, online retail sales across the whole of 2018 saw growth of 11.8% over 2017 ahead of the 9% that was forecast at the beginning of the year.
As Andy Mulcahy, Strategy and Insight Director, IMRG comments: “If there had not been so much uncertainty and shopper confidence had not been so negatively impacted toward the end of the year it seems a reasonable bet that online retail sales growth could have been much stronger than 11.8% for 2018. If Brexit can be resolved so that a course, whatever that may be, is agreed and pursued, it may help to build shopper confidence again with online likely to be the main beneficiary from a retail perspective.
“However, if 2019 proves to be a year of continuing uncertainty, with repeated delays and political instability causing market disruption, it may prove to be a tough year for many businesses to navigate – as we found out in late 2018, online is not immune from that.”
In this issue of InternetRetailing, we take a look at the trends and innovations impacting on retail in 2019. Sir John Timpson shares his insight into what’s really happening on Britain’s high streets. His investigation for the UK Government looked at the wide issues affecting town centres and how they are more than simply a place to shop.
There are towns up and down the UK where footfall it up, there are fewer closed shops and the local community is really doing something to make more people interested in their own town centre. This is down to individual people; inspirational leaders who are getting their local community interested in the future of their town, he explains, and this was the biggest surprise for him while conducting research for ‘The High Street’ report.
He believes that changing town centres isn’t going to be led by retailers though, “it’s community led,” he says, adding “if they create the right spaces and the right atmosphere then the retailers will want to be there. You’re not going to achieve this by retailers changing the way their shops are.”
We are all still coming to terms with the unintended consequences of a digital age but it has not yet been fully comprehended. So, while he says that 2018 was an exceptional year for the number of retail formats reaching the end of their life, he doesn’t think that 2019 will be any worse.
The takeaway is to keep on doing what online retailers do best and exploit digital for the benefit of the customer and the business. This issue of InternetRetailing magazine is full of insight, trends and success stories and I hope that some of them resonate and help you gain a good share of the 9% predicted growth for e-retailing in 2019.