British retailers had a much larger deal than expected in December as the number of Covid-19 infections and new restrictions affected consumer spending on fuel, clothing and sports equipment.
The volume of monthly sales in Great Britain fell by 3.7 percent between November and December, according to data from the Office for National Statistics.
This was a much lower decline than predicted by Reuters economists. It followed a strong growth in November, when early Christmas shopping boosted sales.
“After strong Christmas sales before November, sales fell in December, with responses from retailers claiming that Omicron was affected by the movement,” said Heather Bovill, deputy director of ONS’s research and financial indicators.
Sales at the grocery store dropped by 7.1 percent in December, down from all-purpose stores. Clothing and sportswear stores are down about 8 percent. Sales in retail stores have dropped by 6 percent, while furniture sales are said to have dropped by 3 percent.
“When most consumers are left behind, the pursuit of uninterrupted celebrations at home, until calm and low, gives a little Christmas fun to the sellers,” said Susannah Streeter, chief financial and market analyst at Hargreaves Lansdown.
Petrol sales fell by 4.7% as more people worked at home following the government’s ban on “Plan B” in England, which encouraged people to do so if possible and to avoid travel due to the prevalence of the disease. Retail sales in grocery stores declined.
Another part of the fall is showing a change in spending on Christmas Eve, says James Smith, an economist at ING. Others blamed the high cost of living.
“The slowdown in household finances, rising interest rates and growing personal worries have forced many families to tighten their grip on the end,” said Richard Lim, chief of research firm Retail Economics.
Even in the fall of December, retail sales were 2.6 percent higher than in February 2020, ahead of the first Covid-19 ban. More than a quarter of sales have now been made online, over the epidemic before.
This is the first economic news of December and the fall coincides with the notion that the economy has declined due to the rapid spread of the Omicron coronavirus last month. However, Sam Cooper, vice president of market risk response at Silicon Valley Bank, said the sharp decline in trade in December “does not thwart what the Bank of England expects it to achieve. [continue] raising interest rates at the February 3 meeting. ”
The rise of January January, such as restaurant reservations and declining sales, indicates that “the financial collapse from Omicron will be temporary,” said Martin Beck, chief financial adviser at EY Item Club. However, the effects of rising labor costs will be felt in the long run, he warned.
A report published Friday by research firm GfK showed that in January consumer confidence declined sharply since February 2021 amid concerns about rising domestic prices, particularly rising electricity prices.
“With the financial crisis in the UK approaching, we expect a slower recovery from consumers to prevent further trade,” said Bethany Beckett, an economist at Capital Economics.
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