The MIA’s Membership with the British Retail Consortium gives us access to an expanded portfolio of unbiased research and analysis to share with our members. Today, we’re providing key macroeconomic data from the UK economy, including inflation figures and footfall levels
Inflation starts to ease
Headline Statistics:
- Shop Price annual inflation decelerated to 7.3% in December, down from 7.4% in November. This is above the 3-month average rate of 7.1%. This leaves shop prices remaining near record-highs.
- Food inflation accelerated strongly to 13.3% in December, up from 12.4% in November. This is above the 3-month average rate of 12.5%. This is the highest inflation rate in the food category on record.
- Non-Food inflation decelerated to 4.4% in December, down from 4.8% in November. This is in line with the 3-month average rate of 4.4%. Inflation remains close to record highs in this category.
- Fresh Food inflation strongly accelerated in December to 15.0%, up from 14.3% in November. This is above the 3-month average rate of 14.2%. This is the highest inflation rate in the fresh food category on record.
- Ambient Food inflation accelerated to 11.0% in December, up from 10.0% in November. This is above the 3-month average rate of 10.2%. This is the fastest rate of increase in the ambient food category on record.
Commentary:
Helen Dickinson OBE, BRC Chief Executive, said:
“It was a challenging Christmas for many households across the UK. Not only did the cold snap force people to spend more on their energy bills, but the prices of many essential foods also rose as reverberations from the war in Ukraine continued to keep high the cost of animal feed, fertiliser and energy. Non-food price rises eased as some retailers used discounting to shed excess stock built up during the disruptions to supply chains, meaning some customers were able to bag bargain gifts. The combined impact was that price increases overall plateaued, with the reduction in non-food inflation offsetting the higher food prices.”
“2023 will be another difficult year for consumers and businesses as inflation shows no immediate signs of waning. Retailers will continue to work hard to support their customers and keep prices low. However, further high investment in prices may no longer be viable once the Government’s energy bill support scheme for business expires in April. Without the scheme, retailers could see their energy bills rise by £7.5 billion. Government must urgently provide clarity on what future support might look like or else consumers might pay the price.”
Footfall rises in preparation for Christmas
Headline Statistics:
- Total UK footfall decreased by 7.3% in December (Yo3Y), 6.0 percentage points better than November. This is better than the 3-month average decline of 10.2%.
- High Streets footfall declined by 9.3% in December (Yo3Y), 4.3 percentage points better than last month’s rate and better than the 3-month average decline of 11.0%.
- Retail Parks saw footfall decrease by 5.2% (Yo3Y), 1.0 percentage points worse than last month’s rate and worse than the 3-month average decline of 4.5%.
- Shopping Centre footfall declined by 19.9% (Yo3Y), 3.3 percentage points better than last month’s rate and below the 3-month average decline of 20.9%.
Commentary:
Helen Dickinson OBE, BRC Chief Executive, said:
“Footfall reached its highest level since the start of the pandemic in December. A combination of rail disruption and the cold snap kept many shoppers from visiting town centres and high streets in the last week before Christmas. Meanwhile, the postal strikes forced others to head in for the last week to secure last minute gifts in-store.
“Historically low consumer confidence and 30-year-high inflation made for an exceptionally difficult year for consumers and retailers, with footfall down over 10% on pre-pandemic levels. Nonetheless, this was still a significant improvement on the previous two years when the pandemic kept many people at home. Although retailers’ input costs show little sign of easing in 2023, they continue to do all they can to keep prices affordable and tempt customers in.”
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CHRISTMAS BOOSTS SALES BUT HEAD WINDS FOR 2023
Christmas boosts sales but head winds for 2023
Headline Statistics:
- For 2022 overall, UK Total Retail sales increased by 3.1% from 2021. Food growth was 3.0% and Non-Food growth was 3.2% for the year.
- On a Total basis, sales increased by 6.9% in December, against an increase of 2.1% in December 2021. This is above both the 3-month average growth of 4.4% and 12-month average growth of 3.1%.
- UK retail sales increased 6.5% on a Like-for-like basis from December 2021, when they had increased by 0.6%. This was above the 3-month average growth of 4.1% and the 12-month average growth of 1.8%.
- Over the three months to December, Food sales increased 7.9% on a Total basis and 7.7% on a Like-for-like basis. This is above the 12-month Total average growth of 3.0%. For the month of December, Food was in growth year-on-year.
- Over the three-months to December, Non-Food sales increased 1.5% on a Total basis and 1.1% on a like-for-like basis. This is below the 12-month Total average growth of 3.2%. For the month of December, Non-Food was in growth year-on-year.
- Over the three months to December, In-Store sales of Non-Food items increased 5.3% on a Total basis and 4.5% on a Like-for-like basis since December 2021. This is below the 12-month growth of 25.6%.
- Online Non-Food sales decreased by 3.0% in December, against a decline of 13.9% in December 2021. This is above the 3-month average decline of 3.3% and the 12-month decline of 11.2%.
- The Non-Food Online penetration rate decreased to 42.3% in December from 44.3% at the same point a year earlier.
Commentary:
Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:
“After an exceptionally challenging year which saw inflation climb and consumer confidence plummet, the uptick in spending over Christmas gave many retailers cause for cheer. Many consumers braved the cold snap and the strikes to ensure friends and families got the gifts they wanted, with energy-saving products, warm clothing and boots all selling well. Nonetheless, despite the stronger sales, growth remained below inflation, making December the ninth consecutive month of falling volumes.
“Retail faces further headwinds in 2023. Cost pressures show little immediate signs of waning, and consumer spending will be further constrained by increasing living costs. Retailers are juggling big cost increases while trying to keep prices as low as possible for their customers. And, from April, they will be hit with an additional £7.5 billion energy bill should the Government’s Energy Support Scheme expire. We hope the Chancellor’s announcement this week will provide the necessary extension, or further prices rises will be inevitable.”
