Volumes in food stores slumped by 1.9% in December, contributing to an unexpected contraction for British retail sales last month, according to the latest gloomy economic data to be released this morning.
The Office for National Statistics (ONS) said the amount of goods bought fell 0.3% in December, following a small rise of 0.1% in November.
Economists had been expecting the figure to increase.
Within the food retail sector, the ONS added the monthly fall was strongest within supermarkets, but said sales volumes also fell in specialist food stores, such as butchers and bakers, and alcohol and tobacco stores, including vaping shops.
The fall was partly offset by a rise in non-food store sales volumes, which increased by 1.1% over the month as clothing retailers rebounded from previous declines.
The ONS figures contrast markedly with data from Kantar and NIQ that showed, respectively, supermarkets sales in December rose by 2.1% and 3.2%.
ONS senior statistician Hannah Finselbach said it had beeen “a very poor month for food sales, which sank to their lowest level since 2013, with supermarkets particularly affected”.
“It was a better month for clothing shops and household goods stores, where retailers reported strong Christmas trading.
“With the timing of Black Friday falling within this latest data, our figures when not adjusted for seasonal spending show overall retail sales grew more strongly than in recent Decembers.”
Silvia Rindone, retail lead for UK & Ireland at EY, noted: “Despite the overall mixed results, several food retailers saw record sales in December driven by growth in premium own-label products as consumers opted to splash out over the festive season.”
Danni Hewson, AJ Bell head of financial analysis, highlighted that while some the UK’s biggest supermarkets may have reported record festive figures, trading throughout the month was hit by faltering consumer confidence.
“Worried about their budgets, many households started squirrelling away festive treats months before the big day, and with confidence reeling after October’s budget some consumers seem to have cut back on food spend as sales fell to their lowest levels since 2013.”
She added: “The golden quarter isn’t just a phrase trotted out by analysts, it’s a crucial period of time when retailers make enough money to see them through those sluggish early months of the year when people are paying off their credit card bills and thinking ahead to summer sun. With sales disappointing and confidence scraped raw, there will be concern that some retailers won’t have a cushion to fall back on and will be vulnerable.”
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