Retailers report disappointing Christmas

‘Consumers are battening down the hatches and retailers will see downward pressures on demand’

RETAILERS endured a disappointing Christmas as families “battened down the hatches”.

Sales grew just 1.7pc in December from a year earlier, the British Retail Consortium (BRC) said, despite inflation being at least twice as high. It suggests people bought fewer products from shops than a year earlier.

Helen Dickinson, BRC chief executive, said it was an underwhelming end to a difficult year for shop owners.

Ms Dickinson said: “The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending.” Retailers reported disappointing sales of typical gift items like clothes, jewellery and gadgets. Separate figures from Barclays show spend on clothing fell by 2pc in December, while overall retail spend increased by only 0.6pc.

Paul Martin, UK head of retail at KPMG, said: “Cautious consumers are battening down the hatches and retailers can expect to see significant downward pressures on demand in the opening months of this year.” Lacklustre spending has come despite retailers discounting items more than in recent years. Ms Dickinson warned that shipment disruption through the Red Sea from conflict in the Middle East meant retailers were also facing a difficult start to the new year.

She said: “2024 looks to be another challenging year for retailers and their customers, and spending will continue to be constrained by high living costs. Retailers will also have to juggle various cost pressures, including the rise to business rates this April.”

Restaurants are suffering as well as retailers, Barclays data showed.

Total card spending in restaurants fell 8.8pc, while the number of transactions dropped by 13.1pc.