UK Holiday 2018 Retail Sales and Trading Wrap-Up: December Growth Slows as Uncertainty Accelerates Structural Shift Away from the Midmarket

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Key Points

We review December retail sales and major retailers’ trading updates for the U.K. 

  • Total retail growth slowed sharply in December, according to the Office for National Statistics (ONS). December retail sales increased 2.1% year over year, versus 4.2% year-over-year growth in November. Across the November and December holiday period, total sales were up 3.0% year over year. 
  • In December, the grocery sector reported very weak growth and the department stores/mixed goods sector turned negative. However, clothing stores reported solid year-over-year growth of 2.7%. 
  • Across November and December, online retail sales accounted for 20.6% of all U.K. retail sales and 30% of all nonfood retail sales. 
  • Retailers that focused on value tended to outperform: Tesco and Boohoo Group beat consensus while Primark claimed to have outperformed the U.K. apparel market. 
  • Consumer uncertainty appeared to fuel an acceleration in the structural shift to discount and online retailers. As a result, we saw mid-market difficulties continue, notably at Marks & Spencer and Debenhams.

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