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Retail spending bounces back in December but UK retailers faced a tough festive period

Retail spending bounces back in December but UK retailers faced a tough festive period
Retail spending bounced back in the UK in December 2018 after a tough November as GlobalData’s total retail index rose by 11.5 points versus the previous month, as consumers finally purchased Christmas presents and other seasonal items.

The company’s latest report ‘UK Monthly Spend Tracker – December’ reveals that despite improved spending in December, many retailers started their sales before Christmas to drive revenue and clear through stock. Signifying the wider trend in retail, Next experienced a rise in full price sales from mid-December as financial uncertainty led consumers to wait until December payday to complete their Christmas shopping.

Emily Salter, Retail Analyst for GlobalData commented: “December saw uplift in instore spending in particular as the instore retail spend index increased by 12.1 points versus November. Consumers’ worries around online orders being delivered in time for Christmas lured last-minute shoppers to physical offline locations.”

The electricals sector experienced the biggest increase in total spend index as many items were discounted and products bought as gifts after a disappointing November for the sector. The instore spend index rose more steeply than online, in spite of the deals and products offered by retailers online, especially Amazon. Food & grocery experienced the smallest increase in total spend index, despite the need to buy items specific to Christmas and consumers hosting guests over the Christmas period – consumers actively sought to cut back on spending, choosing more value-led products instead of premium ranges.

Salter concludes: “Looking ahead, although the festive spirit improved consumer sentiment surrounding the economy and personal finances in December compared to November, this slightly increased optimism is unlikely to continue into January, particularly due to the persistent uncertainty of Brexit.”