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British retail sales unexpectedly contracted in December, confounding analysts and adding to concerns over the UK economy’s performance at the end of last year.
The quantity of goods bought fell 0.3 per cent between November and December, following a 0.1 per cent rise in the previous month, the Office for National Statistics said on Friday.
Economists’ median forecast was for a 0.4 per cent expansion, according to a Reuters poll.
In the three months to December, which covers the busiest period of the year for retailers, sales volumes fell 0.8 per cent compared with the previous three months.
Declines in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, which rebounded from falls in recent months, the ONS said.
The retail sales figures are December’s first official economic data and provide additional negative news for chancellor Rachel Reeves.
They followed GDP data on Thursday, which showed the economy grew only 0.1 per cent in November, short of analysts’ expectations. However, on Wednesday, inflation data showed an unexcepted decline to 2.5 per cent in December from 2.6 per cent in the previous month.
ONS senior statistician Hannah Finselbach said December’s fall “was driven by a very poor month for food sales, which sank to their lowest level since 2013, with supermarkets particularly affected”.
She added: “With the timing of Black Friday falling within these latest data, our figures when not adjusted for seasonal spending show overall retail sales grew more strongly than in recent Decembers.”
The pound weakened after the release of the ONS data on Friday, falling 0.5 per cent against the dollar at $1.218.
