Retail spending bounces in December despite Omicron spread

UK retailers posted strong sales last month as shoppers splashed out on bumper Christmas celebrations despite the surge in Covid-19 cases, according to new figures.

The latest BRC-KPMG retail sales monitor revealed that total sales rose 2.1% in the month to January 1 compared with the same period last year.

It added that like-for-like sales were 0.6% higher than the same month last year.

The data highlighted that growth was particularly driven by non-food spending, as shoppers spent more on Christmas gifts.

Over the three months to December, non-food retail grew 4.8%, while food sales reported a 0.4% rise.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “Despite the recent Omicron outbreak, retail sales held up through December.

“Many people chose to shop online rather than travel to nearby high streets and shopping centres.

“Loungewear was back in fashion, as many pre-empted the possibility of future restrictions.

“Meanwhile, the return of work-from-home advice and reduction in Christmas social events caused formalwear sales to slow.

“In the face of rising case numbers and supply-chain issues, people in retail pulled out all the stops to ensure everyone got what they wanted this Christmas.”

However, the figures also showed a slowdown in activity towards the end of the month.

Paul Martin, UK head of retail at KPMG, said: “Following a strong November, retail sales continued to grow in December increasing by just over 2% compared to 2020, although the spread of the Omicron variant and updated Government guidelines slowed spending during the final weeks of the year.

“Consumers continued to head to the high street for their festive gifts, determined to secure the presents they wanted and not leaving online deliveries arriving on time to chance.

“Footwear was the only online category to see mild growth as overall online sales continued to decline, falling by over 8% in December albeit against strong comparators in 2020.”

Meanwhile, figures from Barclaycard revealed a jump in essential spending for the month but flagged that the spread of Omicron has weighed on hospitality and leisure spending.

The credit card spending data showed that total spending rose 12.2% in December on the back of a 13.7% rise in essential spending, with this driven by supermarket shopping and fuel.

Restaurants saw spending slide by 14.1% against pre-pandemic levels from 2019.

Jose Carvalho, head of consumer products at Barclaycard, said: “While consumer card spending levels are up on 2019, December was a mixed picture for retail, hospitality and leisure, as restrictions to tackle the spread of Omicron started to take effect.

“More Brits were either isolating or choosing to stay at home due to the new variant, which hampered face-to-face retailers as well as hospitality and leisure outlets.”