Retail sales crash 3.2 per cent in December as struggling high street hits Covid-era low
UK retail sales plummeted 3.2 per cent in December, well below analyst expectations and the largest monthly fall since January 2021 when coronavirus restrictions pushed down sales.
Analysts had expected sales to fall by 0.5 per cent in the last month of the year, but a significant drop in both food and non-food store sales pulled down volumes.
Throughout all of 2023, sales volumes fell 2.8%, leaving them at their lowest level since 2018.
Heather Bovill, deputy director for surveys and economic indicators at the Office for National Statistics, noted that food stores performed “very poorly” throughout the month, with their steepest fall since May 2021.
Department stores saw sales fall by 7.1% in the month, but Bovill said this had been somewhat abated as consumers moved to purchase Christmas gifts earlier during Black Friday promotions in November, when retail sales rose by 1.4%.
The news comes after a flurry of economic data this week, as economists continue to judge the health of the UK economy.
There was an uptick in inflation picked up in December due to rising duties on alcohol and tobacco, surprising economists who had expected a slight fall.
Most analysts however said the rise was not a moment to panic, with inflation likely to continue falling.
This week, it was reported that annual wage growth eased while job vacancies fell again in the latest indication that the Bank of England’s interest rate hikes are filtering through into the labour market.
Earlier in the month, it was revealed that the number of jobs lost in British retail dropped last year, as 120,000 people still lost their employment.
While many high street brands cashed in over the Christmas period, including with bumper online sales, luxury lines including LVMH, Burberry and Mulberry, have continued to struggle.