As we reach the end of what most commentators have described as a difficult holiday season, it is interesting to look at what the retailers have reported. In fact, nearly three quarters of UK store retailers (73%) have reported positive like for like sales for the Christmas period.  Analysis of 48 UK retailers’ Christmas performance by the business advisory firm Deloitte reveals like for like sales increased in all categories except home and electricals (excluding games).  Average like for like sales increased by 2.8%. Online retailers were the big winners of Christmas 2007 with average sales up over 50% (52.8%).

Richard Lloyd-Owen, Head of Consumer Business at Deloitte said: “As the picture from Christmas trading becomes clearer the signs indicate that the season was not as bad as first feared.  After a difficult summer, an unexpected autumn credit crisis and fears over the economy in 2008, consumer confidence may have been knocked but desire to spend didn’t abate.”

Tarlok Teji, Head of Retail at Deloitte said: “These figures show that many retailers had a good holiday season.  The vast majority are growing and in some sectors, are growing quickly.  Games, Books, Music & Video retailers saw strong like for like increases driven by significant demand in gaming.  Christmas 2007 was the year online shopping really came of age with an estimated 4.4 million people in the UK beating the queues for the sales by shopping online on Christmas Day itself.”

Overall the large food retailers with their expanding non-food ranges delivered strong like-for-like sales. But the retailers which performed particularly well this Christmas also included those which offered convenience such as online and supermarkets.  Shops offering premium produce such as health and beauty retailers and high end Department Stores also did well.  Likewise, retailers of hi-tech electrical goods and video games consoles were also winners this year.

Clothing and footwear suffered more than most this Christmas and the more mainstream electrical retailers also experienced difficult trading conditions. Electricals reported a 1.8% drop in their like for like sales. But overall it is the household goods businesses which were most affected with a reported negative like for like sales average figure of -5.3%.

Teji added: “Big ticket retailers such as electrical and household goods stores are facing much tougher competition than previously, most notably from supermarkets and value retailers.  Footwear is a heavily saturated market and fiercely competitive.”

However, the outlook for the year ahead is one of caution. 

Lloyd-Owen said: “The external environment in the past decade has itself not been benign for retail but the era of easier credit, lower interest rates, rising house prices and a stable economy is at risk. Retailers can also no longer rely on cheap sourcing to drive prices down.  Growth is slowing and costs are rising, putting pressure on retailers’ profit margins.”

“Retailers are being forced to run harder in order to stand still.”

For further information on supporting tables download our full press release Three quarters of retailers report positive Christmas sales. (PDF, 175KB)

Ends

Notes for editors

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.