Retailers in Great Britain suffered a dire Christmas as cash-strapped consumers cut back on shopping in December, fuelling the biggest fall in monthly sales since shops were forced to close during the coronavirus pandemic in 2021.
Sales plummeted 3.2% month on month as retailers across the board suffered as the cost of the living crisis resulted in consumers making tough decisions, including buying food or presents.
The Office for National Statistics (ONS) said the sales slump, which followed a 1.4% rise in November fuelled by Black Friday promotions, hit all retail sectors.
“This was the largest overall monthly fall since January 2021, when the reintroduction of pandemic restrictions knocked sales heavily,” said Heather Bovill, a deputy director at the ONS.
“Food stores performed very poorly, with their steepest fall since May 2021, as early Christmas shopping led to slow December sales.
“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.”
The ONS said overall sales volume across 2023 hit the lowest level since 2018.
The biggest fall in sales was felt at non-food shops – department stores, clothing, household and other non-food outlets – which decreased 3.9% month on month in December.
Retailers partly blamed the scale of the fall on consumers buying gifts earlier than usual in November to spread the cost of Christmas.
Department stores suffered a 7.1% fall in sales, with quieter than usual post-Christmas business and a fall in sales of household goods.
Other non-food stores registered a 4.5% decline in sales, mainly because of a fall in sports equipment purchases, games and toys, watches and jewellery.
Clothing retailers experienced a 1.5% fall in sales, and household goods stores dropped 3%, fuelled by a fall in the hardware store business.
The ONS said that supermarket and food store sales dropped 3.1% after a 1.1% rise in November. The figures sharply contrast the Christmas trading figures reported by several prominent retailers, including Tesco, Sainsbury’s and Marks & Spencer, which all posted strong festive food sales.
There was a 2.1% fall for online retailers, and consumers cut back at the pump, with fuel sales down 1.9%.
“The scale of the decline will have surprised many, with retail sales volumes now falling well below pre-pandemic levels,” said Lisa Hooker, the leader of industry for consumer markets at PwC. “Volumes hit their lowest level since May 2020, right in the middle of the first nationwide lockdown of the pandemic.”
The ONS said overall retail sales volumes fell 2.8% in 2023, after a fall of 3.4% in 2022, reflecting the impact of high inflation and the cost of living pressures making consumers increasingly cautious about spending.
“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,” the ONS’s Bovill said.
• This article was amended on 19 January 2024. As an earlier version said, the 3.2% fall in overall sales in December and the 3.9% drop at non-food shops were both month-on-month decreases, not year-on-year.