UK Christmas retail sales disappoint as shoppers pull back

financialexpress.com:

Total sales grew 1.7% in December, compared with almost 7% growth a year earlier, the British Retail Consortium and consultancy KPMG said in a report Tuesday. Sales of non-food items declined over the three months to December, with shoppers particularly avoiding big-ticket purchases such as furniture and homeware. Clothing, jewelry and technology were other gift categories that struggled. 

“The festive period failed to make amends for a challenging year of sluggish retail sales growth,” said Helen Dickinson, Chief Executive of the BRC. “Weak consumer confidence continued to hold back spending.”

The weak data may stoke concerns that the UK economy could tip into a recession as consumers worry about their financial security. Even as inflation eases in the UK, shoppers are still having to spend more to get less and many are focusing on necessities such as food, heating and housing costs. 

The festive spending season already got off to a weak start in November as consumers felt the burden of the higher cost of living. It’s an important period for retailers with November and December accounting for a fifth of the year’s sales, and even more in some cases. 

Food sales were a notable bright spot, increasing 6.8% in the three months to December, amid higher prices. Volumes of goods sold also increased last month compared with a year earlier. Shoppers spent a record £13.7 billion ($17.4 billion) on food in December as they entertained family and friends, data provider Kantar said last week. 

Gifts, Treats

Beauty, health and personal care products as well as toys and gaming also sold well with consumers focusing on affordable gifts and treats. Online sales fell almost 1% year on year, which was still a better performance than