A surge in online jewellery purchases helped drive a 0.4% increase in UK retail sales in December, defying expectations of a slowdown, according to the latest figures from the Office for National Statistics (ONS).
The data shows that internet shopping performed well last month, with jewellers reporting higher demand for precious metals after a November lull. Supermarkets and automotive fuel sales also saw small rises. However, non-food retailers, such as department, clothing and household stores, experienced a 0.9% drop in sales.
The monthly increase was larger than expected, coming after retail sales fell unexpectedly in November, even during the Black Friday sales period. Sales volumes fell by 0.3% in the final three months of 2022 compared to the previous quarter, with supermarkets and online stores both seeing declines.
But across 2022 as a whole, retail sales were up 1.3%, with stronger performances for both food and non-food stores, as well as non-store retailers (mainly online sellers but also street stalls and markets). This represents the second consecutive annual rise, though sales remain below 2019 pre-pandemic levels.
ONS senior statistician Hannah Finselbach said: “The last three months of the year saw a slight drop in retail sales following a strong third quarter, with supermarkets and online stores both down. However, sales were up in December, with internet retailing doing well. Within this, online jewellers had a strong month and told us there was higher demand for gold and silver.”
The rising cost of living has squeezed shoppers’ purses, and businesses have complained of higher costs following changes announced in the past two Budgets. Nicholas Hyett, investment manager at Wealth Club, said the figures showed there was “no festive cheer on the high street” as Christmas shoppers increasingly turned online.
“Among online retailers, jewellers enjoyed a particularly golden Christmas. In uncertain times, shoppers seem to be being drawn to dual purpose jewels that not only tick the Christmas present box, but provide a convenient long-term store of value as well,” Hyett commented.
Alice Cowley, managing director in Accenture’s retail practice, said the “modest” monthly rise would bring some relief after a “difficult autumn”, but added that while food, discounts and holiday preparations pushed up sales, “it wasn’t enough to drive significant growth”.
“With Christmas being a crucial time for the sector, those wishing for a bumper trading period were left disappointed,” Cowley concluded.
