(Alliance News) - After a challenging year that saw inflation climb and consumer confidence fall, UK retail sales increased by 3.1% in 2021 from the year prior.
Sales increased by 6.9% in December, against an increase of 2.1% in December 2021. This was above both the 3-month average growth of 4.4% and the 12-month average growth of 3.1%.
On a like-for-like basis, sales increased by 6.5% from December 2021, when they had increased by 0.6%.
Over the three months to December, total food sales increased by 7.9%, while non-food sales increased by 1.5%.
"Many consumers braved the cold snap and the strikes to ensure friends and families got the gifts they wanted, with energy-saving products, warm clothing and boots all selling well. Nonetheless, despite the stronger sales, growth remained below inflation, making December the ninth consecutive month of falling volumes," commented Helen Dickinson, chief executive at the British Retail Consortium.
Paul Martin, UK head of retail at KPMG, explained that sales were up largely due to goods costing more. Dickinson warned that cost pressures show "little immediate signs of waning" and added that consumer spending will be further constrained by increasing living costs in 2023.
Looking forward, KPMG's Martin said: "With Christmas behind us, retailers are facing a challenging few months as consumers manage rising interest rates and energy prices by reducing their non-essential spending, and industrial action across a number of sectors could also impact sales."
"The strong demand across certain categories that has protected some retailers will undoubtedly fall away so we can expect high street casualties as we head into the Spring."
"The first half of the year will be tough for retail and a case of survival of the fittest, but we expect to see demand increase as 2023 progresses," he concluded.
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
