Getty PicturesStore gross sales within the UK unexpectedly fell within the run as much as Christmas on account of a “very poor month” for meals being bought in supermarkets, including to considerations over the well being of the UK economic system.
Gross sales fell by 0.3% in December, in line with official figures, effectively under expectations of a 0.4% rise.
Meals gross sales sank to their lowest degree for greater than 10 years final month, however clothes outlets and department shops noticed a lift in commerce.
The weak knowledge follows sluggish financial development figures and up to date turbulence in monetary markets which has despatched the UK’s borrowing prices to the very best degree for a number of years and the worth of the pound down.
The pound slipped to $1.216 following the discharge of the retail gross sales figures, however has since recovered to $1.22.
Authorities borrowing prices over a 10-year interval additionally retreated farther from latest peaks, as expectations develop that the Financial institution of England will lower rates of interest subsequent month.
The expectation of a fee lower additionally helped push up share costs, sending the FTSE 100 inventory index of the UK’s greatest publicly-listed firms to hit a report excessive on Friday.
It comes as Chancellor Rachel Reeves has confronted intense scrutiny over her financial plans this week.
Labour has made development its key goal, however figures launched on Thursday confirmed the economic system flatlining, prompting Reeves to confess the federal government needed to “do extra to develop our economic system”, to be able to enhance residing requirements.
The blow to retail final month was pushed by a drop in gross sales volumes in supermarkets, however butchers and bakers, together with alcohol and tobacco/vaping outlets additionally struggled, in line with the Workplace for Nationwide Statistics.
In distinction, clothes and shoe outlets noticed gross sales rise by 4.4%, rebounding from falls in November and October and reflecting the bounce in spending pre-Christmas.
Economists mentioned the retail gross sales figures on Friday capped off a “disappointing” finish to 2024 for the sector, in a interval companies usually search to take advantage of cash to see them by means of quieter buying and selling months.
“With the chancellor beneath mounting stress to ship development, the information that retail gross sales fell in December of all months is on the very least unwelcome,” mentioned Danni Hewson, head of monetary evaluation at AJ Bell.
Alex Kerr, UK economist at Capital Economics, mentioned the worse-than-expected figures have been “additional proof that the economic system had little or no momentum on the finish of final 12 months”.
However he added it was “not an indication of issues to return”.
“We doubt the economic system’s latest malaise will proceed,” he mentioned, including that he anticipated the households’ disposable revenue would develop this 12 months which might enhance client spending.
Many companies have criticised measures introduced within the Finances, which can see a rise within the fee of Nationwide Insurance coverage paid by employers and a discount within the threshold they begin paying it from April. The minimal wage can be going up.
The boss of Subsequent, Lord Wolfson, instructed the ORIONEWS the adjustments might make it “tougher for individuals to enter the workforce”.
Lisa Hooker, chief of trade for client markets at PwC, mentioned 2025 was more likely to see the return of “increased value inflation as retailers go on the growing value of doing enterprise”.
