Retail sales unexpectedly fell by one per cent last month, which is worse than the 0.5 per cent INCREASE predicted by economists. And it follows a decline in sales of 0.5 per cent in November too.
The latest report from the Office for National Statistics (ONS) shows that spending in non-food stores dropped by 2.1 per cent during December.
“There was continued feedback from retailers suggesting that consumers are cutting back on spending because of “increased prices and affordability concerns,” said Heather Bovill, ONS Deputy Director for Surveys and Economic Indicators.
Department store sales volumes fell by 3.1 per cent in December 2022, from a rise of 2.1 per cent the month before (although longer Black Friday sales contributed to this increase), and contrastingly household goods stores (such as furniture stores) saw sales volumes increase by 1.5 per cent over the month.
Overall, compared with the same period in 2021, sales volumes were down by 5.8 per cent, which is the biggest fall since 1997.
Meanwhile, the proportion of online sales fell from 25.9 per cent in November 2022 to 25.4 per cent in December. The ONS suggested this was the result of postal strikes and other supply chain issues, which pushed more consumers to shop in store.
That might explain why, just a couple of weeks ago, the British Retail Consortium reported that footfall in the UK over the festive period was the strongest since the COVID pandemic began, with retail footfall in December rising an impressive 15 per cent from a year before.
Responding to these latest ONS figures, Helen Dickinson, Chief Executive of the BRC, said: “Volumes fell for the ninth consecutive month as the cost of living squeeze caused consumers to rein in December spending.
“And it is clear that inflation took its toll on the whole of 2022. Many of the cost pressures bearing down on retailers and their customers remain in 2023, however, BRC modelling suggests the situation will improve in the second half of the year.”