Surprise fall in retail sales in December, ONS figures show

There has been a surprise contraction in retail sales in December, despite the month being key for many retailers due to Christmas shopping, official figures show.

Retail sales fell 0.3% last month, according to the Office for National Statistics (ONS).

No drop at all was expected, not least a 0.3% drop. Sales growth of 0.4% had been forecast by economists.

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The figures are of significance as they measure household consumption, the largest expenditure across the UK economy.

Low household consumption can mean economic growth is harder to achieve. The government has repeatedly said growth is its top priority.

Who did well and who didn't?

The December drop is due to a "very poor" month for food sales, which sank to the lowest level since 2013, hurting supermarkets in particular, the ONS said.

The data is in contrast to reports from supermarkets themselves, which reported stellar Christmas trading. It suggests that small shops suffered the brunt of the decline.

Clothes and household goods shops had a better month and reported strong Christmas trading, it added.

These retailers rebounded from falls in recent months.

The ONS also revised down November retail sales growth. Rather than growth of 0.2% in a time of Black Friday discounting, sales rose just 0.1%.

What does it say about the economy?

When the data is not seasonally adjusted to account for Black Friday falling later last year, a brighter picture is shown.

"Our figures when not adjusted for seasonal spending show overall retail sales grew more strongly than in recent December", the ONS senior statistician Hannah Finselbach said.

Behind the headline figure is more positive news, sales volumes excluding petrol increased 2.9% compared to December 2023.

It caps off a week of news that paints a mixed picture of the economy.

While prices are rising at a slower pace than expected, overall growth is weaker than expected.

Friday's data means it's now more likely the economy flatlined in the final three months of the year.

Analysts Pantheon Macroeconomics said the statistics raise the risk of a small GDP fall during the quarter.

No growth was already recorded from July to September, the ONS said.

(c) Sky News 2025: Surprise fall in retail sales in December, ONS figures show