Retail sales drop 3.2% in December, ONS says

Retail sales volumes are estimated to have fallen by 3.2% in December 2023, from a rise of 1.4% in November 2023, the ONS has revealed. 

December’s decrease was the largest monthly fall since January 2021, when Covid-19 restrictions affected sales. Looking at the quarterly picture, sales volumes fell by 0.9% in the three months to December 2023 when compared with the previous three months.

Non-food store sales volumes fell by 3.9% in December 2023, following a 2.7% increase in November 2023. Retailers reported that part of the fall over the month to December was because of consumers purchasing gifts earlier than usual, in November.

Within the non-food sector, department stores sales volumes fell by 7.1% during the month. Other non-food stores sales volumes fell by 4.5%, largely because of falls in sports equipment, games and toys stores, and watches and jewellery stores. 

Household goods stores sales volumes fell by 3%mostly because of a strong monthly fall in hardware stores, while clothing stores sales volumes fell by 1.5%. Retailers reported a slow December because of cost-of-living pressures and reduced footfall. 

Food store sales volumes fell by 3.1% in December 2023, from an increase of 1.1% in November 2023. The November increase was attributed to early Christmas shopping by consumers, with this then partly contributing to the December fall.

Non-store retailing (predominantly online retailers) sales volumes fell by 2.1% in December 2023, following a fall of 1.1% in November 2023. When comparing the three months to December with the previous three months, sales volumes fell by 3.5%.

Overall on an annual basis, sales volumes fell by 2.8% in 2023 and were their lowest level since 2018.

Responding to the latest ONS figures, Kris Hamer, director of insight at the British Retail Consortium, said: “A drop in retail sales volumes in December capped a difficult year for retailers, with sales volumes across 2023 below those seen in 2019. Black Friday sales ate into Christmas spending, while the high cost of living meant some households had to cut back on festive gifting. However, with inflation on a downward trend, and wages slowly rising, retailers hope that consumer confidence and sales volumes will bounce back in 2024.

“Retail is a vital part of the ‘everywhere economy’, serving the communities of every village, town and city in Britain. This is why it’s essential that political parties of all stripes have a clear and cohesive plan for retail as they make their pitch to the public ahead of the next election. Retail accounted for over £462bn in spending, employs around three million people directly, and contributes billions to the UK tax base.”