• Retail sales down 3.7%
• Non-food sales sank by 7.1%
• The “golden quarter” actually saw sales down 0.2% on the previous 3 months
Danni Hewson, AJ Bell Financial Analyst, comments on December Retail Sales
“December’s retail story was exactly the tale stores didn’t want told. As concern about Omicron knocked consumer confidence and left high streets eerily empty considering the time of year, the sound of tills ringing grew, if not silent, certainly quiet. Sales might still have been up on February 2020 but this was Christmas, the golden period when retailers pad their wallets to see them through leaner times.
“Clothing stores, toy retailers, the sectors that traditionally benefit from Santa’s spree were particularly badly hit. Concern about supply issues led to a campaign to get people to spend early and sales were indeed up in October and November, but when you compare the last three months of the year with the previous three months it will make for difficult reading for retailers (Q4 0.2% down on Q3). You could surmise that the “reopening” splurge meant people spent what money they had earlier than they normally would, leaving less for gifts but actually people did spend more over Christmas in terms of value. Price hikes forcing people to spend more on less, even as retailers did their upmost to big up Black Friday offers.
“There was little cheer to be found in the supermarket aisles either, with food sales down 1% compared to the previous month. It’s likely smart shoppers had stocked up early, anticipating a month filled with parties and meals out. But Plan B forced people to rethink. Fuel sales took a nosedive as offices were abandoned for kitchen tables once again and the car sat idly on the drive as trips out were cancelled or rescheduled.
“The cumulative effect led to the largest monthly fall in retail sales since January 2021 when the country was locked back down in reality rather than just by stealth. But though online retailers weren’t hampered in the same way as their bricks and mortar counterparts, they didn’t get a massive bump in sales either. Online numbers were steady away, rather than stellar. This difficult trading period will have left some retailers struggling to make their sums add up. With the cost-of-living crunch expected to force households to tighten their belts there will be little cash left over for any nice to haves or to pick up sales bargains.”
