Retail sales throughout the Christmas period saw the worst performance since 2010, coming dramatically below economists’ already cautious forecasts.
The latest figures from the Office for National Statistics (ONS) have revealed a worrying picture of the high street, with retail sales volumes falling 1.5 per cent month-on-month over one of the most vital periods for the industry.
Analysts had predicted a 0.6 per cent sales decline.
This marks not only the worst December in seven years, but the largest fall in retail sales since the Brexit vote in June 2016.
December’s poor sales meant growth for the full year came in significantly below predictions at 1.9 per cent, the worst growth since 2013.
Despite a heavy drop during the month, sales over the three-month period still saw growth of 0.4 per cent on the prior quarter, though this had slowed to the lowest level since early 2017.
According to the ONS, Black Friday may have skewed December’s sales figures, tempting people to make Christmas purchases during November.
“Consumers continue to move Christmas purchases earlier with higher spending in November and lower spending in December than seen in previous years,” ONS senior statistician Rhian Murphy said.
“However, the longer-term picture is one of slowing growth, with increased prices squeezing people’s spending.”
Online spending continued to perform well, growing 9.4 per cent year-on-year, highlighting the continuing importance of the platform.
BRC’s head of retail insight and analytics Rachel Lund said: “Today’s figures from the ONS reaffirmed the story of Christmas retailing, seen in BRC figures released last week.
“British consumers weren’t shy of spending over the festive period, with sales in value terms holding up. The month on month dive in volume growth may look alarming, but it’s a consequence of the shift in spending into November caused by the recent arrival of Black Friday, which the seasonal adjustment process will need a few more years to adjust to.
“However, the overall picture is of weak growth in quantities sold, which is not great for consumers and means downward pressure on GDP figures will continue. Inflation has meant household budgets simply aren’t stretching as far, particularly in the case of food shopping.
“Heavy discounting in non-food products in the few weeks before Christmas helped shoppers bag a bargain on last minute Christmas gifts, boosting volumes a little at the expense of retailers’ margins, but that did little to change the overall picture.”