UK retail sales fell unexpectedly last month, capping the worst year on record after a cost-of-living squeeze and strikes rattled the industry.
(Bloomberg) — UK retail sales fell unexpectedly last month, capping the worst year on record after a cost-of-living squeeze and strikes rattled the industry.
The volume of goods purchased in shops and online dropped 1% in December after a decline of 0.5% the month before, the Office for National Statistics said Friday. Economists had expected a gain of 0.5%.
The drop was driven by non-food sales as “consumers cut back on spending because of increased prices and affordability concerns,” the ONS said.
Retail sales fell 5.8% from a year ago, the sharpest decline since records began in 1997. Excluding fuel sales, the drop was 6.1%, also the most in records going back to 1989.
In a sign of how red-hot inflation is eroding consumers’ spending power, sales were 13.6% higher in value terms in December compared with pre-Covid levels, but volumes were 1.7% lower. That means consumers are having to pay more to buy less.
Postal strikes in the run-up to Christmas drove more customers into bricks-and-mortar stores over online shopping. The share of online sales slipped to 25.4% and fell by 8.9% compared to a year earlier.
–With assistance from Andrew Atkinson, Joel Rinneby and Mark Evans.
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