The British Retail Consortium has released the results of its recent research into retail sales.
Across the whole of 2023, retail sales grew by 3.6% compared to 2022, which was well below the average 2023 inflation rate forecast by the OBR.
Weak consumer spending over the festive period has been partly attributed.
December sales increased by 1.7%, which it is thought will lower than the inflation figure for the month when released on 17 January. December 2022 sales were a 6.9% increase.
Barclays has said that consumer spending increased by 2.3% in the year to December. Food sales rose by 8.1% for 2023. Non-food sales dropped by a nominal 0.1%. The British Retail Consortium have said that this is due to the sharp rise in grocery prices.
Whilst we are spending more on food, we are also spending more time in the pub afterwards; as spending in pubs, bars and restaurants increased by 7.9% in December, no doubt driven by Christmas parties.
As we have previously reported, inflation fell to 3.9% in November, faster than anticipated. Wage growth has reached record levels, but this still has not offset the cost of living crisis. Interest rates have increased 14 times between December 2021 and August 2023. Some commentators think that the Bank of England will reduce interest rates five times this year in response to this sluggish growth, and reducing inflation.
Reduced retail sales has also had the knock-on effect of some 10,500 retailers ceasing to trade last year, and almost 120,000 retail jobs being lost.