December retail sales see their biggest drop in decades as inflation hit Christmas spending.

Inflation-ridden shoppers cut spending by record amounts last month, dashing hopes for a Christmas recovery in the country’s ailing retail sector.

The 1 percent drop in sales reflected a 0.5 percent drop in November when Black Friday failed to boost sales, according to the Office for National Statistics (ONS).

December volumes fell 5.8 percent from December 2021, the biggest drop this month in 1997 reports.

Retail sales also fell last year, the largest on record. Between 2021 and 2022, they fell by 3 percent, the biggest drop since ONS registration began.

Retailers told the ONS that “consumers are cutting back on spending due to higher prices and availability issues.”

Consumer price inflation eased slightly to 10.5% last month after hitting a 41-year high of 11.1% in October, but food and non-alcoholic beverages prices were hit particularly hard.

Heather Bovill, an analyst at ONS, said shoppers stocked up early, causing food sales to drop in December.

“Online sales have dropped and reviews have shown that mail strikes have encouraged people to buy more items in the store,” she said.

Sales at non-food stores fell 2.1% in December as consumers cut back on non-essential spending.

The share of online shopping fell to 25.4% from 25.9% in November, with some online retailers reporting they were hit by strikes at Royal Mail last month.

Helen Dickinson, CEO of the British Retail Consortium, said the association expects budgetary pressures to ease in the second half of the year.

“The high cost of household bills, especially for electricity, and rising inflation on food have created a difficult Christmas atmosphere with a drop in consumer confidence. However, the increase in discounts helped to encourage gift giving, resulting in a stronger increase in clothing and furniture sales.”

John Allan, chairman of Britain’s largest supermarket chain Tesco, said that while there is hope that inflation will drop sharply by mid-year, “this does not mean that prices will fall.”

He said: “I think this means that price increases will hopefully be much less dramatic in the second half of this year, and probably in 2024 and beyond, before we see the normal inflation rate that we watched. have. enjoyed for years.”

Olivia Cross, an economist at Capital Economics, said the unexpected drop was evidence that the resilience of the UK economy at the end of 2022 is declining in December. “Furthermore, we believe that much of the ongoing activity of high inflation and higher interest rates is yet to be felt,” she said.