The high street suffered its worst December on record last month as retailers battled with Arctic weather conditions and shoppers shunned higher prices.
Retail sales volumes declined 0.8% month-on-month – the lowest reading since records began in 1988, the Office for National Statistics (ONS) said.
Food stores saw a 3.4% drop in year-on-year sales volumes – another record plunge – as prices soared 5%, the ONS added.
Friday’s official figures offer a definitive view on the impact the adverse weather and economic climate had on Christmas sales, as varied trading reports from retailers such as Marks & Spencer, Next and HMV have muddied the overall picture in the sector.
High Street giant M&S and British department store favourite John Lewis reported strong sales growth earlier this month, while fashion chain Next and entertainment group HMV blamed the severe weather for a slump in sales.
In the supermarket industry, Sainsbury’s led the way, with 3.6% like-for-like sales growth in the 14 weeks to January 8, while UK number one Tesco disappointed with 0.6% same-store sales growth.
But the biggest drop within overall retail sales volumes came from food, which declined 0.9% month-on-month, the ONS said. Soaring food prices, reflected within the rising rate of Consumer Price Index inflation which stands at 3.7%, were “not helping” food retailers, the ONS said.
But companies noted a change in shoppers’ behaviour during the severe weather spell – consumers were turning to local stores to buy small volumes, rather than heading to out-of-town behemoths for weekly or monthly shops.
The ONS said internet sales continued to strengthen – now constituting a record 10.6% of all retail sales – as £770 million was spent online in December. But even internet food sales were hit by the weather, the ONS added, as retailers noted a tailing-off of sales after December 13, when reports of delayed and failed deliveries started to surface. Household goods stores also performed badly, matching the 0.9% month-on-month decline seen in food.
The ONS said there was no evidence to suggest consumers were snapping up big-ticket items, such as televisions or fridges, ahead of January’s VAT hike, as electrical appliances declined in December. Department stores did weather the storm, and were up 0.3% month on month, with the new Xbox Kinect selling well across the sector. The ONS noted a rise in sales volumes at sport equipment stores. The volume of retail sales was also flat year-on-year, once again a record low, the ONS said. The value of retail sales rose 2% year-on-year, but declined 0.6% month-on-month.