Retail Sales: Disappointing Figures In December

Retailers have failed to get the Christmas boost they were hoping for, as sales volumes in December fell.

Retail sales excluding fuel slipped by 0.3% when compared with November, official figures showed.

Volumes were just 1.1% higher than in December 2011, according to the Office for National Statistics (ONS), which seasonably adjusts the figures.

Both non-food and food sales were weak, the ONS said, but more consumers bought products on the internet.

Household goods, including electrical appliances, furniture, and DVDs, showed the steepest monthly fall with a decline of 3% - the biggest since January 2010.

Food sales fell 0.3% as a hike in the cost of a supermarket shop hit customer's pockets.

But the trend towards online shopping continued, with over 10% of all purchases in December being made over the internet - a month-on-month rise of 1.6%.

And the average weekly spend online over the month was over £830m - 15.5% higher than December 2011.

Newedge Strategy analyst Annalisa Piazza said that most analysts had expected a slight monthly increase in December.

"Both food and non-food store sales were weak in December, showing a wide-spread cautious approach in last year's Christmas shopping," she said.

"All in all, today's lower-than-expected outcome for UK retail sales casts some doubts on the performance of GDP in the fourth quarter - data out next week."

Philip Shaw, an economist with Investec, added: "The high street seems to have stalled again over the past few months.

"Recovery prospects will depend strongly on a pick-up in consumer activity over the first few months of 2013."

The pound fell to an 8-week low against the US dollar after the data was released. 

Christmas was a testing time for many struggling high street stalwarts, and not all survived.

Since the start of the New Year, three major retailers have called in administrators - camera chain Jessops, entertainment retailer HMV and DVD rentals company Blockbuster.

But Dixons, which owns Currys and PC World, and Argos said strong online sales helped boost their performance over the festive period.