Retail sales in the UK saw an unexpected decline in December, despite the festive period, primarily due to poor performance in the food sector, as reported by the Office for National Statistics on Friday.
In December, retail sales volume fell by 0.3% from the previous month, contrasting with a revised 0.1% rise in November and defying expectations of a 0.4% increase. Supermarket sales saw declines, which were somewhat balanced by recoveries in non-food stores, particularly clothing retailers, where sales rebounded after previous downturns.
Food store sales dropped by 1.9% month-on-month, reaching their lowest index levels since April 2013. In contrast, non-food store sales increased by 1.1%, and sales of automotive fuel rose by 1.6%.
Excluding auto fuel, retail sales experienced a 0.6% decrease, following a 0.1% rise in November, against the anticipated 0.1% growth.
Year-on-year, retail sales recorded a growth of 3.6% after stagnation in November, although this was below the expected 4.2% rise.
When excluding auto fuel, retail sales volumes grew by 2.9%, reversing a 0.5% decline from the previous month, with predictions having anticipated a 3.6% annual increase.
Online spending saw its first monthly increase since September, climbing 1.5% in December, while the annual sales value went up by 1.7%. Overall sales volume dropped by 0.8% in the fourth quarter compared to the previous quarter but rose by 1.9% compared to the same period the previous year.
In 2024, retail sales volume increased by 0.7%, after declines of 2.9% in 2023 and 4.1% in 2022. While this constitutes the first increase in three years, sales volumes have not yet returned to the levels seen in 2022, according to the ONS.
"While the economy faced challenges towards the end of last year, we believe this will not persist," commented Alex Kerr, an economist at Capital Economics. He added that as real incomes continue to grow, the retail sector is poised for improved performance in 2025.
The material has been provided by InstaForex Company -
www.instaforex.com
