Data published by the Office for National Statistics (ONS) showed that retail sales fell by 0.3% in December, offsetting the November increase (+0.1%, revised from +0.2%). Economists had expected sales to grow by 0.4%. Falls in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, which rebounded from falls in recent months. For the three-month period (through December), sales volumes fell by 0.8% when compared with the three months to September.
Meanwhile, in December, retail sales excluding fuel decreased by 0.6% after rising by 0.1% in November (revised from +0.3%). Consensus estimates suggested an increase of 0.1%.
The data also showed that, in annual terms, retail sales increased by 3.6% in December after remaining unchanged in November (revised from +0.5%). Economists had expected an increase of 4.2%. When compared with their pre-coronavirus pandemic level in February 2020, volumes were down by 2.5%.
The ONS said that food stores sales volumes fell 1.9% m/m, putting index levels at their lowest since April 2013. The monthly fall was strongest within supermarkets, but sales volumes also fell in specialist food stores (such as butchers and bakers), and alcohol and tobacco stores (including vaping shops). This fall was partly offset by a rise in non-food stores sales volumes (the total of department, clothing, household and other non-food stores) which increased by 1.1% m/m. Clothing stores had the largest upward contribution, rising by 4.4%, rebounding from falls of 3.5% in November. Department stores and household goods stores also rose over the month which retailers attributed to stronger Christmas sales.
The data also showed the amount spent online, known as online spending values, rose by 1.5% on a monthly basis (the first monthly rise since September) and by 1.7% per year. The proportion of online sales increased to 27.0% from 26.5% in November.