Food sales subdued in December, figures reveals

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Food sales growth stalled in December, new research reveals.

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The latest figures from the Office for National Statistics shows food sales shrank by 3.4%, down from a strong growth rate of 2.8% in November. The ONS said food sales were “subdued, as retailers reported lockdowns and restrictions on the sale of non-essential items impacted on footfall”.

Food stores reported annual growth of 4.3%, the highest yearly growth since 2001. Anecdotal evidence from retailers suggested that click-and-collect and online services had boosted sales – food stores recorded a 79% year-on-year increase in the value of internet sales in 2020.

Overall British retail sales rose by 0.3% between November and December after the relaxation of the second national lockdown in England. However, retail sales plunged by 1.9% for the year, as the pandemic triggered the biggest annual decline on record.

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “Last month’s Christmas period will already be long forgotten for many of us, however, the UK retail industry may well look upon it as a fond memory – with spending up versus the previous year, despite the impact of the pandemic on festivities.

“As lockdown measures prevented people celebrating at bars and restaurants, the public instead opted to enjoy the festive period at home, and so spent heavily on food and drink in December.”

Ian Geddes, head of retail at Deloitte, added: “Despite the challenges that 2020 brought, retail overall has shown some resilience in the final month of the year. Strong performance in grocery and record-breaking online sales for non-food meant that Christmas 2020 was the most digital ever.

“Having entered 2021 under renewed lockdown restrictions, retailers will be looking to consumer behaviours during the pandemic to predict which new trends are likely to emerge, and which will carry over.”

Aled Patchett, head of retail and consumer at Lloyds Bank, said: “The themes of 2020 – namely the polarising effect of the pandemic across grocery and non-essential brands, as well as those with and without a strong online presence – have been evident in the raft of financial results being posted by big-name retailers this month. The latest lockdown will likely only further those trends and it will be interesting to see how engrained they have become once the vaccination rollout means lockdown eases and shoppers can return to high streets.

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