Surprise drop in December food sales, reports ONS

The fall in food store sales is slightly less than the overall retail drop of 0.5% by volume, which comes against the background of 10.5% inflation over Christmas.

The fall in December food sales volume followed a 1% increase in November and the ONS said that “feedback from some retailers suggested that the November increase was because of customers stocking up early for Christmas”.

Other figures in the ONS monthly retail analysis indicated that December’s online food sales were 12.2% down on the same month last year but unchanged compared to November.

Bill Grimsey, the former boss of Iceland and Wickes, told the BBC Today programme that the drop in retail volumes was particularly disappointing, as “Christmas is the key trading time for retailers to often make a difference between profit and loss, particularly in the food sector where volumes are so very important”.

Silvia Rindone, retail lead for EY in the UK and Ireland, added that the downbeat nature of the December ONS figures contrasted with the more positive sounding trading updates from supermarkets because although volumes were down, the amount spent was up.

Rindone said: “Trading updates from retailers over the last few weeks have shown that most – particularly the big four supermarkets – performed better than expected and experienced a strong festive peak in sales terms, although it’s worth noting that sales growth has been driven by customers spending more due to inflation rather than buying more.”