British retailers won a boost from higher prices over the key Christmas trading period but the volume of goods sold slumped as sky-high inflation hits broader buying, data revealed Tuesday.
Revenue jumped almost seven percent in December from a year earlier largely thanks to surging food prices, according to a survey by the British Retail Consortium (BRC) and financial firm KPMG.
“The rise in sales masked a much larger drop in volumes once inflation is accounted for,” a statement said. December marked the ninth month in a row of falling volumes.
By contrast, retail revenue rose 3.1 percent last month compared with December 2021, the data showed.
“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,” said BRC chief executive Helen Dickinson.
“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.”
UK inflation dipped last month to 10.7 percent but remains close to 40-year highs, forcing consumers to switch to cheaper products.
German discount supermarket Lidl on Monday revealed its revenue from UK sales jumped by almost one quarter over the festive period.
Lidl said 1.3 million more customers passed through its stores in the week before Christmas compared with one year earlier.
“Every week of the year we are seeing more customers coming through our doors, switching spend to Lidl from the traditional supermarkets,” said Ryan McDonnell, chief executive of Lidl GB.
“We know they switch to us to make savings.”
Rival discounter Aldi last week revealed a similar UK jump over the festive season.