Retail sales record biggest monthly fall for more than four and a half years

The UK’s retail sector recorded the sharpest fall in sales for more than four and a half years, official figures have revealed.

The Office for National Statistics (ONS) said sales in December dropped 1.9 per cent compared to the month previous, while the greatest falls were recorded in non-food stores.

Experts had previously predicted the dip to come in at much closer to 0.1 per cent.

Analysts at Lloyds blamed weeks of sales in November, such as Black Friday and Cyber Monday, making it “even harder to keep shoppers spending during December”.

Alan Clark, of Scotiabank, said retailers have had a “disastrous December”. He pointed to inflation figures released earlier this week impacting on retailers’ ability to keep prices down.

“This is likely to be the theme for the rest of the year – higher prices will reduce disposable income and hurt consumer spending growth,” he said.

The figures seem to indicate that some sectors performed significantly better than others. Kate Davies, ONS senior statistician, said small retailers, in particular butchers, reported a significant boost in sales in the run-up to Christmas.

Likewise, digital retailers boasted revenue which was 21.3 per cent higher than in December 2015.

However, retailers which performed poorly during the festive season shouldn’t necessarily expect a poor January, said Keith Richardson, managing director of retail at Lloyds Bank Commercial Banking.

“Consumer spending held up – against expectations – after the EU referendum and it may do so again,” he said.