Food sales increased 6.8% on a total basis over the three months to December, new data reveals.
The latest BRC-KPMG Retail Sales Monitor, shows food sales that in December, food sales were in growth year-on-year.
For 2023 overall, food growth was 8.1%, the data reveals.
Sarah Bradbury, Chief Executive of IGD, said: “We leave 2023 on an encouraging note for food and grocery as December sales saw an increase on 2022. While these were down by a month-on-month comparison – continuing the trend seen in October and November – this is likely caused by falling food and drink inflation which has dropped for the eighth consecutive month.
“Volume increased slightly versus December 2022, with Christmas week seeing the largest weekly year-on-year volume increase since April, likely helped by retailers cutting the prices of essential Christmas dinner vegetables.”
In addition, total retail sales increased by 1.7% in December, against a growth of 6.9% in December 2022. This was below the three-month average growth of 2.3% and below the 12-month average growth of 3.6%.
For 2023 overall, UK total retail sales increased by 3.6% from 2022.
Helen Dickinson, Chief Executive of the British Retail Consortium, 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.”
