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LONDON – The UK’s consumer spending in December saw an increase of 2.3% compared to the same month the previous year, signaling a slowdown from the growth observed in November and remaining below the current rate of inflation. Despite the overall rise, certain sectors showed varied performances.
The fashion retail sector barely grew, with a slight 0.2% increase in the number of transactions, but a more noticeable 2% drop in the amount spent. This contrasts with the hotel and leisure industry, which enjoyed a robust 8.9% rise in spending, highlighting a consumer preference for experiences over goods.
In stark contrast, outdoor and sports retailers, including major names like JD (NASDAQ:JD) Sports, were hit hard with a 6.2% decline in sales, reflecting a challenging period for this segment of the retail market.
The health and beauty sectors managed to buck the trend with a spending increase of 3.8%, even as they faced a fall in the volume of sales. This suggests that while fewer items were sold, the items that were purchased were likely more expensive.
Discount stores, often seen as beneficiaries during tighter economic times, reported a significant downturn with transactions falling by 12.7% and spending by 10.2%, indicating that consumers may be cutting back on even the most cost-effective shopping options.
Department stores experienced a mixed outcome, with an increase in the number of transactions suggesting more customers walked through their doors, but this did not translate into higher spending, as there was a slight decrease reported in the amount spent.
The BRC-KPMG report shed further light on the retail landscape, indicating a 3.6% rise in December retail sales. However, this figure does not take into account the impact of inflation. When adjusted for inflation, the report suggests a contraction in the volume of goods sold, particularly in non-food items which saw a 0.1% decrease. The decline in online non-food sales was less steep, suggesting a shift in consumer habits but still aligning with the broader trend of reduced spending power amidst rising prices.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Source: Investing.com
