The increased cost of goods saw sales in December increase by almost 7% year-on-year.
The British Retail Consortium (BRC)-KPMG Retail Sales Monitor has shown that sales for the month increased by 6.9%, which was up on the three-month average of 4.4%, and the 12-month average of 3.1%. The figure is compared to December 2021, which saw an increase of 2.1%.
On a like-for-like basis, sales increased 6.5% in UK retail from December 2021, when they had increased by 0.6%.
The rise in sales value, however, masked a significant drop in sales volumes. The figures showed that consumers avoided high value tech purchases, sticking instead to energy efficient household appliances and usual Christmas purchases.
Postal strikes encouraged shoppers to purchase in-store, with online sales growth continuing to decline across a number of categories.
Helen Dickinson, chief executive of BRC, commented: “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.
“Nonetheless, despite the stronger sales, growth remained below inflation, making December the ninth consecutive month of falling volumes.
“Retail faces further headwinds in 2023. Cost pressures show little immediate signs of waning, and consumer spending will be further constrained by increasing living costs.”
Paul Martin, UK head of retail at KPMG, added: “Whilst the numbers for sales growth in December look healthy, with sales values up by nearly 7% on last year, this is largely due to goods costing more and masks the fact that the volume of goods that people are buying is significantly down on this time last year.
“With Christmas behind us, retailers are facing a challenging few months as consumers manage rising interest rates and energy prices by reducing their non-essential spending, and industrial action across a number of sectors could also impact sales.”
