Retail sales volumes are estimated to have fallen by 3.2% in December 2023 following a rise of 1.4% in November, according to the Office for National Statistics (ONS).
Retail sales fell despite Christmas and reported discounts offered by major chains. ONS figures show that in December 2023 non-food store sales volumes fell by 3.9% and clothing stores sales volumes fell by 1.5%.
Non-store retailing (mostly online retailers) sales volumes fell by 2.1% in December 2023, following a fall of 1.1% in November 2023.
December’s decrease was the largest monthly fall since January 2021, when Covid restrictions affected sales. Compared with the same period a year earlier, retail sales volumes fell by 0.9% in the three months to December 2023.
Retail sales end year ‘on sour note’
Charlie Huggins, manager at Wealth Club, said: “Retail sales volumes ended the year on a sour note, registering the largest monthly decline since January 2021. Partly, this is because UK consumers did their Christmas shopping early this year. Nevertheless, December’s decrease was much worse than expected and suggests pressure on the UK consumer may be intensifying.
“Results from retailers themselves over Christmas paint a very mixed picture. The supermarkets fared reasonably well, as did Next and M&S. But sales from the likes of JD Sports and Superdry have been very disappointing. This suggests UK consumers are becoming more choosy about where to spend their money.
“Whether December’s weak retail sales are a blip or the start of a more worrying trend remains to be seen. But one thing’s for sure – despite optimism around interest rate cuts, the UK economy certainly isn’t out of the woods.”
Adam Ward, chief executive officer at Airtime Rewards, said: “Retailers’ optimism will be waning following the latest drop in retail sales figures. At a time of year when consumers are more willing to spend and buy gifts for loved ones, December’s figures paint a different picture. On top of the surprise rise in inflation figures on Wednesday, this will be a blow to their confidence.
“Darker nights and cold bouts of weather will be playing a part in consumers’ lack of enthusiasm to hit the high streets. Amid this ongoing challenging environment, retailers must showcase their best efforts in attracting and retaining their customer base. Introducing initiatives that are aimed at cutting costs and demonstrating customer value will be critical, and those who do so will come out on top in the new year.”
