Pound hit by sharp drop in food sales in supermarkets
Shop sales in Britain unexpectedly fell ahead of Christmas in what was a “very bad month” for food sales in supermarkets.
According to official data, sales declined 0.3% in December, well below expectations for a 0.4% rise.
Food sales fell to their lowest level in more than 10 years, but clothing stores and department stores saw an increase in business.
The pound slipped from $1.22 to $1.21 after the data. This shocking data will raise concerns about the health of Britain’s economy.
Economists said the figures portend a “disappointing” end to 2024 for the retail sector, the period in which businesses typically try to make the most money.
Alex Kerr, UK economist at Capital Economics, said the worse-than-expected sales figures were evidence that there was very little momentum in the economy at the end of last year.
But he added: “Although the economy was clearly struggling at the end of last year, we doubt this will last.”
Elliot Jordan-Doke, senior UK economist at Pantheon Macroeconomics, also suggested he expected “a recovery in sales in the new year”.
The blow to the retail sector last month was caused by a decline in sales volumes in supermarkets, but specialist food stores such as butchers and bakers, as well as alcohol and tobacco/vaping shops, also struggled, according to senior statistician Hannah Finselbach. The National Statistical Office, which releases the data.
In contrast, clothing and shoe stores saw sales rise 4.4% last month, recovering from declines in November and October and reflecting increased spending ahead of Christmas.
