The British Retail Consortium has warned 2024 looks set to be another challenging year for UK retail with spending constrained over high living costs.

In the three months to December, non-food sales fell 1.5% on a total basis, steeper than the 12-month average decline of 0.1%.

During December, non-food was in decline year-over-year.

In the three months to December, in-store non-food sales fell 1.3% on a total basis since December 2022. This is below the 12-month average growth of 1.6%.

While online non-food sales fell 0.8% in December, against a decline of 3.0% in December 2022. This was shallower than the 3-month decline of 1.7% and the 12-month decline of 2.8%.

For 2023 overall the non-food decline was 0.1%.

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British Retail Consortium chief executive Helen Dickinson OBE said: “The festive period failed to make amends for a challenging year of sluggish retail sales growth, as weak consumer confidence continued to hold back spending. The post-Christmas sales were unsuccessful in enticing spend in areas such as furniture and homeware, with households remaining cautious about making larger purchases.

“Sales saw a slight uptick in the week leading up to Christmas as consumers scrambled to purchase last-minute gifts, particularly online, due to the wet weather. In gifting, beauty products were the standout performer and toys and gaming also sold well.

“2024 looks to be another challenging year for retailers and their customers, and spending will continue to be constrained by high living costs. Retailers will also have to juggle various cost pressures, including the rise to business rates this April. This will be compounded by other emerging issues, such as the disruption to shipments from the Far East via the Red Sea. Political parties must consider this backdrop when they set out their plans for retail in manifestos so they can help support the industry to grow, invest, and serve customers.”

Paul Martin, UK head of retail, KPMG, added: “Retailers rolled out promotions that lasted longer and were deeper than last year and higher promotional activity amongst supermarkets saw grocery price inflation fall at its fastest rate on record in December. Whilst promotions are margin dilutive, retailers have done some great work in re-engineering supply chains to make them more cost-effective, which has given more room to push ahead with discounting, and given the current environment, this is likely to stay with us for a while.

“Despite falls in inflation, an upcoming cut in national insurance rates, and some consumers having more money in their pockets this Christmas than last, the constant drip of economic challenges they’ve faced over the last two years has finally come home to roost. As we start a new year, cautious consumers are battening down the hatches and retailers can expect to see significant downward pressures on demand in the opening months of this year, which will ease off by Spring if the economic conditions continue to improve and confidence slowly returns.”