Business

Cost of living: Shoppers curbed Christmas spending in blow to struggling retailers

Cost of living: Shoppers curbed Christmas spending in blow to struggling retailers

Retail sales unexpectedly fell by 1% last month over the vital Christmas period, official figures show.

Economists had forecast a 0.5% rise in December.

It follows a drop of 04% in November.

ONS deputy director for surveys and economic indicators, Heather Bovill, said: “Retail sales dropped again in December, with feedback suggesting consumers cut back on their Christmas shopping due to affordability concerns.

“After last month’s boost as shoppers stocked up early, food sales fell back again in December with supermarkets reporting this was due to increased food prices and the rising cost of living.”

The latest data comes as consumer confidence dipped again to a near-historic low in the face of inflation woes and growing concern about another hike in energy bills.

GfK’s long-running Consumer Confidence Index fell three points in January to minus 45 after a short-lived and weak rally in the last quarter.

While the rate of inflation dipped for the second month in a row in December, to 10.5%, offering more evidence the peak of the cost-of-living crisis has passed, this offered little relief for households and businesses still wrestling with high prices.