British retail sales drop sharply in December as Omicron spreads

British retail sales contracted by far more than expected in December as surging Covid-19 infections and new restrictions hit consumer spending on fuel, clothing and sports equipment.

The volume of monthly retail sales in Great Britain fell 3.7 per cent between November and December, according to data from the Office for National Statistics.

This was a much larger contraction than the 0.6 per cent forecast by economists polled by Reuters. It followed strong growth in November, when early Christmas shopping boosted sales.

“After strong pre-Christmas trading in November, retail sales fell across the board in December, with feedback from retailers suggesting Omicron impacted on footfall,” said Heather Bovill, the ONS deputy director for surveys and economic indicators.

Non-food stores sales plunged 7.1 per cent in December 2021, with declines across all types of stores. Fashion and sports equipment stores registered sharp falls of about 8 per cent. Sales in department stores were down 6 per cent, while furniture stores reported a 3 per cent drop. Sales in food stores were also down.

“As Plan B restrictions in England meant more people working from home, there was a notable fall for fuel sales,” she added.

Petrol sales fell 4.7 per cent as many people worked from home and needed to self-isolate or avoided travelling following a surge in infections. Food store sales dropped 1 per cent.

Despite December’s fall, retail sales were 2.6 per cent higher than in February 2020, before the first Covid-19 restrictions.

“However, despite the fall in December, retail sales are still stronger than before the pandemic, with over a quarter of sales now made online.”

Separate data published on Friday by the research company GfK showed that in January consumer confidence fell to the lowest level since February 2021, amid worries about the rising cost of living and surging energy bills.