UK retail sales suffer sharpest monthly drop since the pandemic

investmentweek.co.uk:

Non-food store sales volumes fell by 3.9% last month, following a 2.7% increase in November when Black Friday discounts increased sales.

Retail sales volumes fell 3.2% between November and December, following a 1.4% rise in the previous month. 

This came against expectations by economists polled by Reuters of just a 0.5% point fall, and was the largest monthly decline since January 2021, when coronavirus restrictions affected sales.

Non-food store sales volumes fell by 3.9% last month, following a 2.7% increase in November when Black Friday discounts increased sales. 

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«Food stores performed very poorly, with their steepest fall since May 2021 as early Christmas shopping led to slow December sales,» said Heather Bovill, deputy director at the ONS.

«Department stores, clothing shops and household goods retailers reported sluggish sales too as consumers spent less on Christmas gifts, but had also purchased earlier during Black Friday promotions, to help spread the cost.»

Online retailers sales volumes dropped by 2.1%, following a fall of 1.1% in November, while automotive sales volumes declined by 1.9% following a rise of 0.8% the month prior.

Sales volumes fell by 2.8% in 2023 and were their lowest level since 2018, after a 3.4% fall in 2022, the ONS said, as high inflation and cost of living pressures forced consumers to cut back on spending. 

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«The longer-term picture remains subdued, with quarterly sales dipping, while annual sales volumes fell for the second consecutive year, to their lowest level in five years,» added Bovill.

Michael Field, European market strategist at Morningstar, said today's retail