British retail sector suffered a fall in underlying sales in December for the fifth straight year, a survey showed on Friday, adding to evidence consumers are tightening their belts.
Britons are being squeezed by slow wage growth and a jump in inflation that followed the 2016 Brexit vote, prompting many forecasters to predict a further weakening in the overall economy this year after a slowdown in 2017.
Accountancy and business advisory firm BDO said its monthly High Street Sales Tracker (HSST) showed a 2.3 percent fall in like-for-like sales in December.
BDO said its data reinforced reports of a last minute Christmas buying spree. It said all categories recorded year-on-year growth in the week to Dec. 24, after negative like-for-like sales in the first three weeks of December.
“With discretionary spend under pressure, shoppers have been forced to think twice before making their purchases and have shown a preference to prioritise spend on food and drink, home comforts and trips out to restaurants and bars this festive season,” Sophie Michael, BDO’s head of retail and wholesale, said.
By contrast, food price inflation picked up last month.“Many non-food retailers have been keeping prices low to stimulate spending, which will undoubtedly have come at a cost to margins,” said Mike Watkins, head of retailer and business insight at Nielsen, which conducted the BRC survey.
Department store chain Debenhams issued a profit warning on Thursday after it was forced to cut prices to drive sales of Christmas gifts, illustrating the challenges facing some of Britain’s best known retailers
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