UK retail sales remain lacklustre amid household income squeeze - BRC

UK retail sales remained lacklustre in the industry's vital festive period, a widely followed survey showed on Tuesday, with non-food sales growth the lowest in five years.

Figures from the British Retail Consortium showed sales increased 0.6% in December, the same as the month before, as price inflation drove a 2.6% rise in food sales that was all but wiped out by a 2.2% fall in non-food retail sales.

High street sales in the three months to December of non-food items declined 4.4% on a like-for-like basis, which is the lowest rate since 2012, when the BRC's records began.

Helen Dickinson, the BRC’s chief executive, said: “With inflation outpacing income growth, shoppers continued to see more of their spending power absorbed by essential items, including food, leaving less left over for buying Christmas gifts.

“That made this year’s festive period all the more nail-biting for non-food retailers, many of whom offered deep discounts in the last weeks before Christmas in the hope of something to celebrate at the end of a year, which has seen, on average, zero growth in non-food sales.”

Analyst Michael Hewson at CMC Markets said the data reinforced the narrative "that despite higher prices and a more price sensitive consumer the appetite for retail spending still remains fairly strong. It just appears to be more focussed on value."