- Retail sales fell 0.3% in December
- Food sales fell to lowest levels since 2013
- Clothing sales rebounded and more shoppers turned to online stores
Danni Hewson, AJ Bell head of financial analysis, comments on the latest retail sales figures:
“Some of our biggest supermarkets have reported record Christmas trading figures but official numbers from the ONS show a significant fall in food sales during December.
“Worried about their budgets, many households started squirrelling away festive treats months before the big day and with confidence reeling after October’s Budget some consumers seem to have cut back on food spend as sales fell to their lowest levels since 2013.
“There was some cheer to be found from clothing retailers where sales grew 4.4% as Santa packed out stockings with socks and pyjamas and revellers splashed out on party wear.
“These figures are seasonally adjusted because the big shopping events Black Friday and Cyber Monday were included in this period and if you factor in those sales things looked markedly better. But all those discounts and promotions come at a price to margins and with the sector braced for increased labour costs there’s little wonder many are talking about price increases.
“Whilst inflation happily fell in December it is expected to climb again over the next few months which will scrape away at the little bit of extra cash people may have in their pockets thanks to above inflation pay rises.
“With the chancellor under mounting pressure to deliver growth, the news that retail sales fell in December of all months is at the very least unwelcome.
“The golden quarter isn’t just a phrase trotted out by analysts, it’s a crucial period of time when retailers make enough money to see them through those sluggish early months of the year when people are paying off their credit card bills and thinking ahead to summer sun. With sales disappointing and confidence scraped raw there will be concern that some retailers won’t have a cushion to fall back on and will be vulnerable.”
