Food sales in the United Kingdom plummeted to their lowest level in over a decade, marking a concerning development for the retail sector as it grapples with a "disappointing" end to 2024. Official figures reveal a 0.3% drop in sales for December, defying expectations of a 0.4% rise. This unexpected decline has raised alarms about the overall health of the UK economy, particularly as it occurred during the crucial pre-Christmas trading period.
The downturn in supermarket sales was a major factor behind the overall slump, with specialist food stores, including butchers and bakers, also experiencing difficulties. Alcohol and tobacco/vaping shops faced similar challenges. Hannah Finselbach, a senior statistician at the Office for National Statistics, described December as a "very poor month" for food being sold in supermarkets.
Despite these setbacks, clothing shops and department stores witnessed a boost in trade, with sales rising by 4.4% last month. This surge could not offset the broader decline, leaving the retail sector struggling to capitalize on the typically lucrative holiday season.
The pound's value reflected these disappointing figures, slipping to $1.21 from $1.22 following the release of the data. Economists view this as further evidence of the economy's lack of momentum at the close of 2024.
"further evidence that the economy had very little momentum at the end of last year" – Alex Kerr, UK economist at Capital Economics
The unexpected drop in sales has added to concerns about the UK's economic outlook, as economists express doubts over whether the current struggles will persist. The retail sector must now navigate these challenges while seeking strategies to boost consumer confidence and spending.