UK shop sales fell 0.4% in December compared with the same month in 2003, making it the worst Christmas for retailers in 10 years.
Figures published by the British Retail Consortium (BRC) today show that last minute Christmas shopping and the early start to the sales season were not enough to boost consumer interest.
The organisation blamed fears over the wobbling housing market and higher interest rates for the poor footfall.
According to the figures, December started slowly and got progressively worse until the Christmas week, when there was a marked upturn which endured in the post-Christmas period.
However, analysts at the BRC believe consumers remain cautious about larger purchases. Stores selling furniture and homewares, clothing and footwear suffered because of this, while only food and drink outlets made gains.
Kevin Hawkins, BRC’s director general, said “Even the materialisation of the expected last minute rush and strong trading for many retailers in the post-Christmas Sales could not turn December into a positive month.”
“However, it was far from the speculative hype of the ‘worst Christmas in living memory’ proposed by some commentators.
“The lack of consumer confidence created by uncertainty over the economy and housing market dominated December and remains a strong concern for the sector as it shows no sign of abating in the immediate future.
Hawkins called on the Bank of England’s Monetary Policy Committee (MPC) to cut interest rates when it meets on Wednesday and Thursday. Rates currently sit at 4.75%, having been lifted from 3.5% back in November 2003.
Analysts now think that there is a slim chance of a near-term cut in the cost of borrowing.
