Rachel Reeves’ budget has been blamed for a fall in consumer spending (Image: Getty)
UK retail sales fell last month, with food and specialist retailers taking the biggest hit, according to released on Friday.
Analysts had expected the figures to rise by 0.4% after a 0.1% increase in November.
is expected to come under more pressure following the announcement.
Since announcing a raft of tax and National Insurance hikes in her maiden budget last October, the embattled Chancellor of the Exchequer has been blamed for a dramatic rise in the cost of government borrowing and a dive in both UK business and consumer confidence.
Alice Haine, personal finance analyst at Bestinvest said shoppers may have been adopting a more cautious approach towards spending during the Christmas period. She said: rates have been volatile since the Budget amid shifting expectations and the cost of servicing loans, credit cards and overdrafts remains high.”
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December was a weak month for supermarkets and food store sales fell by 1.9% to their lowest level in more than a decade, the ONS said.
Specialist food stores like butchers and bakers, as well as alcohol and tobacco shops – including vaping shops- also saw sales volume decline.
Clothes and shoe shops defied the trend to rise 4.4% in December, while department stores and household goods stores also rose over.
ONS senior statistician Hannah Finselbach said: “Retail sales fell in December following last month’s slight increase.
“This was driven by a very poor month for food sales, which sank to their lowest level since 2013, with supermarkets particularly affected.
“It was a better month for clothing shops and household goods stores, where retailers reported strong Christmas trading.
“With the timing of Black Friday falling within these latest data, our figures when not adjusted for seasonal spending show overall retail sales grew more strongly than in recent Decembers.”
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Erin Brookes, European retail and consumer lead at Alvarez & Marsal, told PA: “Sales disappointed in December after five months of positive growth, signalling that retailers are already being hit by low consumer confidence on spending.
“Despite working hard on both in-store and online shopping experiences and offering some enticing deals, retailers failed to drive spending in the crucial ‘golden quarter’, setting them up for a difficult start to 2025.
Kris Hamer, director of insight at the British Retail Consortium, said: “In non-food, electricals, beauty and books made for popular presents.
“Meanwhile, sales of furniture and other large-ticket items were hard hit as families continued to think twice before making larger purchases, and clothing and footwear sales remained muted.”
He added that retailers were set to come under pressure from new costs from the autumn Budget facing the industry in 2025.
“Higher employer national insurance contributions, higher national living wage, and a new packaging levy will heap pressure on an industry that is already paying more than its fair share of tax,” he said.