A divided Christmas for retail as cost pressures take hold

Responding to the Retail Sales Index - Office for National Statistics, which showed sales up 4.9% by value, and up 3.1% by volume, Harvir Dhillon, Economist at the British Retail Consortium, said: 

“ONS retail sales figures show a fragmented market over Christmas, with larger retailers seeing sales drop 1.6% while smaller independents grew 6.4%. Food sales remained relatively stable, but this was owing to rising food inflation rather than increased sales. Typically popular Christmas gifting categories such as electricals, books and health and beauty saw sales drop as people tightened their purse strings. Shoppers are continuing to hold back spending as they manage the rising cost of living.
 
“This performance capped off a difficult year, where significant cost pressures have been weighing down on the industry. If these costs continue to climb, whether through higher business rates bills or higher costs of employment, then it will be ordinary workers who are most affected as more entry-level and flexible jobs disappear. This means more people tightening their belts, and less spending in the economy in future.”