The figure for December was far worse than forecast by market consensus – double the 0.5 per cent fall anticipated by experts. It also follows on from the 0.5 per cent fall recorded in November.
According to the Office for National Statistics (ONS), this “continues a broad downward trend that has been seen since the lifting of hospitality restrictions in summer 2021”.
The value (amount spent) by shoppers also fell in December by 1.2 per cent, compared to a 0.5 per cent rise in November.
This mirrors results from a separate ONS survey in December which found 60 per cent of adults were planning to cut back on the amount of money they spent on Christmas 2022 compared to last year.
‘Only choice is to spend less’
Danni Hewson, AJ Bell financial analyst, said: “For most people the fact the inflation number is falling doesn’t mean anything. December’s cold snap reminded us all that the cost of energy has gone through the roof and, as we watched those smart meters tick up at an alarming pace, many people reconsidered how much they could afford to splash out on their Christmas celebrations.”
Cande Cooper, UK retail consulting lead at Deloitte, said: “December’s festive period wasn’t enough to boost retail sales as volumes fell by one per cent, an unexpected deterioration. This marks two consecutive months of retail sales decline in the ‘Golden Quarter’.
“The outlook for the next twelve months remains difficult for both consumers and retailers. While inflation is beyond its expected peak, it will still be one of the drivers behind retail sales value growth, with costs ultimately being passed on to consumers that could negatively impact demand.”
