UK Retail Sales Drop Unexpectedly On Weak Food Store Sales

(RTTNews) - UK retail sales declined unexpectedly in December despite the festive season as food sales logged its worst performance since 2013, data from the Office for National Statistics showed Friday.

Retail sales volume decreased 0.3 percent on a monthly basis in December, in contrast to the revised 0.1 percent gain in November. The decline confounded expectations for an increase of 0.4 percent. Sales declines in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, where sales rebounded from falls in recent months, data showed.

Food store sales showed a monthly fall of 1.9 percent, taking the index levels to their lowest since April 2013. Meanwhile, non-food store sales grew 1.1 percent and automotive fuel sales advanced 1.6 percent.

Excluding auto fuel, retail sales declined 0.6 percent after a 0.1 percent gain in November. Sales were forecast to climb 0.1 percent.

On a yearly basis, retail sales grew 3.6 percent after remaining flat in November. However, growth was weaker than the forecast for 4.2 percent gain.

Excluding auto fuel, retail sales volume posted 2.9 percent growth in contrast to the 0.5 percent decrease a month ago. Economists had forecast an annual growth of 3.6 percent.

Online spending registered its first monthly rise since September, up 1.5 percent in December. The sales value rose 1.7 percent annually. Overall sales volume decreased 0.8 percent in the fourth quarter from a quarter ago but rose by 1.9 percent from the same period last year.

In 2024, retail sales volume climbed 0.7 percent, following a fall of 2.9 percent in 2023 and 4.1 percent in 2022. Although this marked the first rise in three years, sales volumes have not returned to 2022 levels, the ONS said.

"Although the economy clearly struggled at the end of last year, we doubt that will last," Capital Economics economist Alex Kerr said. As real incomes continue to grow, the retail sector should still have a better 2025, the economist added.