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Retail sales slump over Christmas amid Omicron surge

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Written by: Emma Lunn
21/01/2022
Christmas 2021 was the worst on record for retailers as sales slumped by 3.7% due to concerns aout the spread of the Omicron variant.

The month-on-month fall was the biggest since January 2021 and the worst for the festive period on records going back to 1996, according to the Office for National Statistics (ONS).

The monthly fall in December 2021 follows monthly growth of 0.8% and 1.0% in October and November 2021, with ONS analysis and feedback from retailers suggesting some earlier Christmas trading during those months.

Non-food stores sales volumes fell by 7.1% in December 2021, with falls in each of its sub-sectors (department stores, clothing stores, other non-food stores and household stores) following strong sales in November.

Automotive fuel sales volumes fell by 4.7% in December 2021 workers returned to working at home leading to reduced travel. Fuel sales volumes were 6.6% below their February 2020 levels.

Emma-Lou Montgomery, associate director at Fidelity International, said: “Christmas joy was in short supply for retailers throughout December, with sales down 3.7%. Muted Christmas celebrations, self-imposed isolation ahead of family gatherings and the rising cost of living all hit spending at traditionally the busiest time of year, prompting shopping on only the bare festive essentials; shown by the fact that non-food stores sales volumes fell by 7.1%.

“Even the famous Boxing Day sales failed to leave the tills ringing in quite the same way, with several well-known high street giants extending Christmas closures to reward staff with an extra day off and encouraging customers to shop online instead.

“The ground is very unsteady as we head into 2022. Omicron has caused significant staffing challenges across many sectors and supply chains. With inflation showing no signs of easing any time soon, households will have little choice but to cut-back to try and meet surging living costs. The lifting of Plan B restrictions offers a slight glimmer of hope, with workers heading back to offices and increasing town centre trade. But the thing that will be keeping retailers awake at night is consumers’ appetite to spend, which will no doubt be increasingly dulled this January.”

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