RETAILERS reported a disappointing Christmas with sales trailing far behind inflation over the festive season.
Sales in December rose by just 1.7%, a huge drop off from 6.9% the year prior while inflation (rates are due to be released on the January 17) is likely to be at least twice as high.
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Across the whole year, sales grew but 3.6% according to the British Retail Consortium (BRC) and KPMG, while inflation the average inflation rate is 7.5%, according to Office for Budget Responsibility (OBR) forecasts.
Consumer spending for the year to December increased by 2.3% according to Barclays, down from 2.9% in November.
Christmas parties did boost the hospitality sector according to the bank’s research with a 7.9% jump in pub, bar and restaurant spending over the festive month.
Helen Dickinson, BRC chief executive, said: ““The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending.
“The post-Christmas sales were unsuccessful in enticing spending in areas such as furniture and homeware, with households remaining cautious about making larger purchases.”
Jack Meaning, chief UK economist at Barclays, said: “We saw inflation fall significantly at the end of 2023 and we expect it to fall further in the opening months of 2024.
“This puts more spending power in the pockets of consumers and should help to support them to continue to spend, even against the tough backdrop of weak economic growth.”