// Retail sales will grow 2.3% to 3.5% in 2023, according the British Retail Consortium (BRC)
// The first half of 2023 will be “challenging” as retail sales are predicted to grow between 1% and 2.3%
Retail sales will continue to be “challenging” in the first half of 2023 following an “exceptionally difficult” year for the industry.
The British Retail Consortium’s latest analysis predicts sales for the retail industry will grow between 2.3% and 3.5% in 2023.
Last year’s low retail sales growth, shadowed by rising inflation and weakened consumer demand, will continue in the first six months of 2023 with sales projected to grow between 1% and 2.3%.
However, the outlook is expected to brighten in the second half of the year, when retail sales are expected to grow 3.6% to 4.7%.
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The BRC said food sales growth will continue to outperform non-food categories as shoppers tighten their belts prioritising essential items.
However,,food sales growth will slip slightly in the second half of the year but will fall at a slower rate than the expected decline in food inflation.
Food inflation jumped to its highest ever level in November at 12.4% while overall inflation dipped to 10.7%.
BRC’s director of insight Kris Hamer said: “The first half of the year is likely to challenging for households and retailers.
“Ongoing inflation will make sales appear to be rising, but we expect falling volumes as consumers continue to manage their spending.
“We also don’t see many signs at this stage of retailers’ input costs easing, with energy costs expected to rise by £7.5 billion as the government’s Energy Bill Relief Scheme comes to an end in March, putting ongoing upwards pressure on prices.
“There is cause for optimism in the second half of 2023, when we expect inflation to ease and improving consumer confidence to result in an improvement to sales growth, and corresponding volumes.”
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