UK retail sales in December only grew because of inflation, according to research from the British Retail Consortium (BRC).
Sales during the five weeks to 30 December 2023 increased by 3.6% year-on-year, falling behind November’s headline inflation figure of 4.2%, which indicates that sales volumes were down compared to 2022.
In December alone, sales increased 1.7%, which is slower than the 6.9% in the same period in 2022.
This represents a slowdown from the average growth of 2.3% in the last three months of the year, and compared to the 3.6% growth over the past 12 months.
Helen Dickinson, chief executive officer of the British Retail Consortium, said: “The festive period failed to make amends for a challenging year.
“The post-Christmas sales were unsuccessful in enticing spend in areas such as furniture and homeware, with households remaining cautious about making larger purchases.”
Looking forward, Dickinson expects another tough year in 2024 and warned that spending will be limited by the continuation of the cost-of-living crisis.
Additionally, retailers will have to contend with rising cost pressures, exacerbated by business rate increases in April, and shipping disruptions due to the problems in the Red Sea.
Paul Martin, UK head of retail at KPMG said: “Cautious consumers are battening down the hatches and retailers can expect to see significant downward pressures on demand in the opening months of this year, which will ease off by Spring if the economic conditions continue to improve and confidence slowly returns.”