Spending during the holiday season was weaker than expected, according to industry data

UK retailers reported lackluster sales around Christmas as consumers continue to struggle amid soaring inflation, the British Retail Consortium (BRC) and consultancy KPMG have jointly reported.

Data released on Tuesday shows that total sales rose just 1.7% in December, compared with almost 7% growth a year earlier. Sales of non-food items declined over the three months through December, the figures showed, as shoppers particularly avoided purchasing items such as furniture and homeware, as well as clothing, jewelry and technology.

“The festive period failed to make amends for a challenging year of sluggish retail sales growth,” said Helen Dickinson, chief Executive of the BRC. “Weak consumer confidence continued to hold back spending,” she noted.

The sluggish retail sales come as shoppers have had to contend with high inflation, which has squeezed household incomes. Statistics show that consumer price inflation was 3.9% in November, down from 10.1% in January 2023. However, wages failed to keep up with prices for most of the year, while the economy shrank by 0.1% in the third quarter. 

READ MORE: British shoppers limit spending

A recent report by the Office for National Statistics (ONS) showed that Britain’s economy unexpectedly contracted in the third quarter of 2023, raising the possibility that the country is already in a technical recession, which is typically defined as two quarters or more of falling GDP. The Bank of England had earlier projected a 50% chance of a recession in the second half of 2023.

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