Early Christmas shopping and November discounts brings COVID lockdown level shock fall in December retail sales

There has been a shock fall in retail sales in the key December shopping period, sharpening the decline seen in recent months, official figures show.

Data from the Office for National Statistics (ONS) said sales fell an unexpected 3.2%, despite Christmas and reported discounts offered by major chains and some positive reports by major high street outfits.

Follow latest: Energy supplier with worst ranking revealed – but three are recommended

Not since the middle of the COVID-19 pandemic lockdown, in January 2021, had retail sales fallen at such a level.

It has been a far worse performance than the 0.5% drop expected by economists and a reversal of the 1.4% growth seen in November when discounts got people spending.

Those early discounts, such as Black Friday deals, tempted shoppers to spread the cost and get buying earlier which had a knock-on effect on December, the ONS said.

Falls in sales were across the board.

Food stores “performed very poorly” due to early Christmas shopping while department stores, clothes shops and household goods outlets recorded “sluggish sales” as less was spent on Christmas gifts, the ONS said.

As a result, sales volumes descended to the lowest level in five years.

Especially steep was the fall in sales volumes in non-food stores, which dropped 3.9% after growing 2.7% a month earlier.

Retail sales figures are important as household consumption is the largest expenditure across the UK economy.

Accordingly, the data can be indicative of overall economic growth.

The UK already had a quarter of economic contraction from July to September last year.

A second three-month period of economic decline would mean the UK is in recession.

A country is technically in recession after two-quarters of negative growth.