Christmas cheer on the High Street: Retailers shrug off fears of a festive bloodbath as sales soar 6.9% higher than a year earlier
The High Street enjoyed a dose of Christmas cheer as it defied fears the country’s shops would suffer a festive bloodbath.
In a boost to the retail industry, figures showed December sales were 6.9 per cent higher than a year earlier, more than double the average 3.1 per cent growth seen throughout the year.
The report, from the British Retail Consortium (BRC), said households ‘braved the cold snap and strikes’ to buy Christmas presents for friends and family.
December sales on the High Street were 6.9% higher than a year earlier, more than double the average 3.1% growth seen throughout the year
However, boss BRC Helen Dickinson put much of the increase down to higher prices.
And she warned of a tough year ahead as consumers rein in spending in the face of persistently high inflation.
Retailers also face a hit from higher energy bills as the Government scales back support, she added, leading to further price hikes for consumers.
The warning comes at the start of a crucial week for firms updating investors on how they fared over Christmas.
Marks & Spencer, Sainsbury’s, Tesco, Asos and Halfords are among the companies due to publish results.
Last week retail giant Next defied the economic doom and gloom by revealing bumper sales over Christmas. Boots, Greggs and B&M Bargains also delivered upbeat figures, suggesting households kept shopping despite facing soaring living costs.
And yesterday German discount grocer Lidl said it picked up an extra 1.3m customers in December, with sales jumping a quarter from a year earlier.
That followed rival Aldi, which saw sales soar over Christmas as cash-strapped consumers flocked to the discount chain for their festive shop.
The BRC report showed the rise in sales in December was driven by food as families splashed out to celebrate their first Christmas without Covid restrictions in three years. The figures showed a 7.9 per cent jump in food sales in December from a year earlier.
Non-food sales also rose by 1.5 per cent, with the more modest increase coming as shoppers shunned big ticket purchases such as TVs.
Instead, they snapped up clothes, beauty products and energy efficient appliances, the figures showed.
Dickinson said: ‘After an exceptionally challenging year which saw inflation climb and consumer confidence plummet, the uptick in spending over Christmas gave many retailers cause for cheer.
‘Many consumers braved the cold snap and the strikes to ensure friends and families got the gifts they wanted, with energy-saving products, warm clothing and boots all selling well.
Nevertheless, despite the stronger sales, growth remained below inflation, making December the ninth consecutive month of falling volumes.’
Dickinson warned there will be ‘further headwinds’ for businesses this year and said ‘further prices rises will be inevitable’ as energy bills rise.
Accounting giant KPMG said December’s sales growth was driven by higher prices, with the actual amount of goods sold falling.
Head of UK retail Paul Martin said retailers face a ‘challenging few months’.
He said: ‘The strong demand across certain categories that has protected some retailers will undoubtedly fall away, so we can expect High Street casualties as we head into the spring.’
