Written by: Keith Tully
Published: 20th January 2017
Retailers around the UK suffered what one economist has called a “disastrous December” with overall sales levels falling sharply during the final month of 2016.
According to official figures from the Office for National Statistics (ONS), sales among Britain’s retailers fell by 1.9 per cent during December as compared with the previous month.
That slide represents the steepest fall in retail sales numbers since April 2012 and has sparked concerns that 2017 could be a tough year for high street and online traders across the country.
Alan Clark from Scotiabank said the ONS’ numbers highlight the challenges retailers are facing and suggested that inflationary pressures are starting to take their toll on consumer spending habits.
Calling last month a disastrous December, Mr Clark has said that a pattern of falling retail sales “is likely to be the theme for the rest of the year”.
From a quarterly perspective retail sales have been rising consistently and were up by 5.6 per cent during the final three months of 2016 as compared with the same period of last year.
The figures for December also show that sales volumes among the UK’s retailers were up 4.3 per cent last month as compared with the final month of 2016.
However, experts had been expecting to see the comparable year to year figures for December up by 7.2 per cent.
A recent Reuters’ poll of economists forecast only a 0.1 per cent drop in December sales which now looks conspicuously optimistic given that the actual month-to-month figures were down by 1.9 per cent.
“The sharp decline in retail sales in December is the first sign that rising inflation and slowing job gains are forcing shoppers to curb their consumption,” said Samuel Tombs from Pantheon Macroeconomics.
Some economists have suggested that the relatively disappointing figures for December were offset to some extent at least by a notable surge in retail sales during October and November, which was attributed in large part to Black Friday sales events.
ONS figures show that store prices including fuel around the UK were 0.4 per cent higher in December than November and as much as 0.9 per cent higher on average than they were in December 2015.