Retailers face a tough 2023, with rising rates and the cost-of-living crisis to persist, trade body the British Retail Consortium (BRC) has warned.
“Cost pressures show little immediate signs of waning, and consumer spending will be further constrained by the increasing living costs,” said Helen Dickinson, the BRC’s chief executive.
To add to their woes, the Government’s energy support scheme will be reduced from April.
Introduced by Chancellor Jeremy Hunt, the new scheme will replace the previous cap on the cost of gas and electricity of all businesses and likely to be a £7.5bn hit on businesses.
Total retail sales in the UK grew by 3.1% in 2022 from 2021, although these figures do not account for inflation, which is running at historical highs, meaning the rise in sales masks a true drop in volumes.
Retailers did experience somewhat of a Christmas boost, with sales in the five weeks to 31 December up 6.9%, above the three-month average of 4.4%.
Food sales saw the largest growth, up 7.9%, with shoppers filling their trolleys with Christmas dinner essentials.
One area in continual decline however was non-food online sales, according to data from the BRC.
Online non-food sales decreased by 3% in December, albeit this was better than the three-month average of a 3.3% decline.
“Despite the bad weather, and with postal strikes ongoing, shoppers opted to head for the high street to browse for Christmas presents, with online sales growth continuing to slide across a number of categories,” said Paul Martin, UK head of retail and KPMG.