After the consumer collapsed in November, retail sales made a dramatic turnaround in December. A huge demand for online jewellery fuelled this increase, despite a dip in consumer confidence and budgets across markets. Retail sales came in 1.3% higher than this same time last year and jumped up this month by 1.3%. This rebound comes on the heels of a 0.1% decline in November and a 0.8% drop in October.
According to Census data, non-food retailers suffered the greatest collapse in sales, off 0.9% in December. Behind this decline are the difficult realities faced by physical stores. Consumers are being forced to make more difficult choices as the cost of living goes up. This was true even as general retailers saw a drop in sales, both in bricks-and-mortar stores and on e-commerce platforms, during the last quarter of 2022.
Neil Bellamy, GfK’s UK consumer insights director, highlighted the continued difficulties facing consumers.
“We remain a long way from consumers feeling that better days are around the corner.” – Neil Bellamy
Although the general retail landscape is still tough, non-store retailers—mostly online sellers—had a strong showing in December. This expanding trend is a reflection of changing consumer behavior, as more Americans seek the convenience and value of online shopping. Ecommerce jewelers expressed a high level of demand for gold and silver products. As the holiday shopping season begins in earnest, shoppers are looking for products that double as gifts and future investments.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, called it a peculiar situation for online jewellery retailers over the period.
“Among online retailers, jewellers enjoyed a particularly golden Christmas. In uncertain times shoppers seem to be being drawn to dual purpose jewels that not only tick the Christmas present box, but provide a convenient long-term store of value as well.” – Nicholas Hyett
While this is certainly a bright spot for online jewellery, the retail picture overall continued to be very shaky. Given this fact, it’s important to remember that monthly growth rates can swing widely in either direction. In the last three months of the year, sales volumes decreased by 0.3% against the previous quarter. This indicates that December, though a welcome breath of fresh air for industries like construction, signals a continuation of an incomplete recovery.
Policy manager Alice Cowley shone a light on these complicated dynamics as we move into the festive season.
“But while food, discounts and holiday preparations pushed up sales, it wasn’t enough to drive significant growth.” – Alice Cowley
The surging cost of living is pinching consumers’ disposable income. That’s why business is up in arms over shifting the cost of doing business following the unexpected government budget announcement last week.