Fashion
Retail sales fell more sharply than expected in the core Christmas month, capping the worst December performance for volumes since 2010.
The Office for National Statistics (ONS) issued the grim update on the health of the high street just hours after Carpetright became the latest big name chain to announce a profit warning .
The retail figures showed sales volumes fell 1.5% on November which was boosted by strong Black Friday trade.
It marked the biggest month-on-month fall since June 2016 – the month when the UK was focused on the Brexit vote on 23 June.
The Leave win prompted a collapse in the value of the pound, resulting in a leap in shop prices during 2017 as a whole as stores passed on higher import costs.
Higher inflation, coupled with earnings failing to keep pace, has been a thorn in the side of the retail sector as the squeeze on shoppers’ budgets has dented demand for non-essential goods.
The ONS said 2017 was the weakest year for retail since 2013 but it still recorded year-on-year growth of 1.3% and a rise of 1% over the final quarter of the year.
How the major retailers have fared over Christmas
Senior statistician, Rhian Murphy, said: “Retail sales continued to grow in the last three months of the year partly due to Black Friday deals boosting spending.
“Consumers continue to move Christmas purchases earlier with higher spending in November and lower spending in December than seen in previous years.
“However, the longer-term picture is one of slowing growth, with increased prices squeezing people’s spending.
“Over the year the proportion of internet spending is continuing to rise, with almost one in every five pounds spent online by the end of 2017.”
Ruth Gregory, UK economist at Capital Economics, said it was difficult to get a clear picture of the state of the high street because the ONS figures showed retail sales values rising – suggesting a limited impact from price pressures.
“A fall in retail sales volumes in December had always looked likely, given November’s hefty rise.
“After all, UK retailers’ adoption of “Black Friday” discounting appears to have caused consumers to bring forward their Christmas purchases, rather than to buy more overall in recent years,” she wrote.
