Online food and clothing among the few winners this Christmas retail season, Mastercard reports

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December capped a year of growth for UK retail, according to Mastercard SpendingPulse. Holiday retail sales increased 2.2% this December compared to last year, ramping up in the final days before Christmas. E-Commerce spending grew by 11.5% y-o-y in December.

Mastercard SpendingPulse, which accounts for all spending in the UK, including cash and card payments, revealed weaker footfall in the Boxing Day sales, as shoppers were satiated by discounting around Black Friday. This impacted the y-o-y comparisons, as some holiday sales shifted into November results.

The contrasting fortunes of high street and internet retailing were encapsulated by the grocery sector. Overall spend on groceries grew by just 0.5% in December y-o-y, but that is before being adjusted for price inflation.

However, there is a strong indication that households are increasingly entrusting supermarkets to deliver their Christmas food shopping as online groceries grew by 10.7% y-o-y.  This far exceeds growth of the previous three months.

This trend was also reflected in clothing. Overall spending fell by 1.3% while e-commerce clothing sales grew by 13.7% y-o-y.

Premium goods were less in demand, and in December the luxury and jewellery sectors contracted by 3.4% and 5.6% year-on-year respectively.

Mastercard previously released its SpendingPulse results for the U.S. holiday shopping season, which was more positive with 4.9% growth.

Scott Abrahams, senior vice president of business development at Mastercard UK & Ireland, said: “When looking at the year as a whole, 2017 saw retail sales increase 4%. Although Christmas trading was tough and showed a mixed performance among retailers, these results do show that there some areas of optimism for British retailers, particularly those with a strong online presence.”