AJ Bell press comment – 16 December 2022
- Retail sales down 0.4% compared to the previous month’s bounce
- Food sales up 0.9% as consumers shop early to spread the cost
- Sales down 0.7% compared to pre-Covid levels but the cost was up an 14.1%
Danni Hewson, AJ Bell financial analyst, comments on the latest retail sales figures:
“Retail’s fairy godmother has failed to wave her magic wand and despite Black Friday promotions and a rush by households to spread the cost of a Christmas feast, sales are down.
“Worried about the rising cost of food, people have been popping a few extras into their trollies as they’ve carried out the weekly shop. All those little tasty treats add up when food inflation is rising at the fastest rate in 45 years.
“People are having to make tough choices about what exactly it is they want from this Christmas. What can they do without, and what are the traditions and expectations that can’t be ditched if Christmas is to feel like Christmas rather than a poor substitute?
“Tins of colourfully wrapped chocolates, bottles of fizz, chips and dip – all things that considerably tally at the till and will drain discretionary funds that for many are already down to a trickle.
“And looking at the damp squib that was Black Friday, it seems clear that if people are spending a bit more on food and drink, they’ve got to cut back elsewhere.
“After October’s bump, non-food retailers might have been crossing everything but momentum has stalled and if you compare sales in what should have been a ‘golden month’ with those of February 2020, the situation is clear – sales are down 0.6% on the previous month but 1.8% below pre-pandemic levels.
“There was some good news for department stores, often something of a magnet at this time of year and sales here were up. Perhaps shoppers have been mixing gift buying with a chance to hunt up a new outfit for those office parties.
“There was also a flurry of activity in household goods stores as people rushed to snap up air friers, electric blankets and energy saving appliances whilst they were heavily discounted.
“And with warnings about postal strikes ringing in many ears, a chance to literally grab a bargain might have played into things – certainly, online sales have continued on the downward trend.
“It could be people are waiting until they’ve got their Christmas paycheques in their hands and with the big day on a Sunday there is still plenty of time for tills to ring out their merry tune.
“But cost is the X-factor looking at sales numbers from the three-month period a year ago and comparing them to the last three months the story is pretty easy to read. People are paying a whole lot more to buy a whole lot less and that’s hurting consumers and retailers alike.”
