Retail sales suffered their worst December tumble on record last month, with the Omicron variant blamed for driving away shoppers.
The 3.7% month-on-month fall in sales volumes reported by the Office for National Statistics (ONS) follows a strong November, when some consumers opted to do their Christmas shopping earlier.
A drop in demand for petrol and diesel, due to more people working from home under Plan B rules, has also contributed to the crisis.
It was much worse than the 0.6% drop that had been predicted by forecasters and was the biggest December drop since 1996.
The fall was also the worst in any month since last January, when Britain was under a tough new lockdown.
He highlighted the pressure on businesses created by the Omicron variant – and the restrictions designed to combat its spread – during the key holiday season.
They will be now hoping for a boost as Plan B rules are lifted – although separate figures released by GfK on Friday show a sharp drop in consumer confidence blamed on soaring living costs.
ONS data showed retail sales in December failed to even match last year’s festive period, registering a 0.9% year-on-year decline. ‘other.
Heather Bovill, ONS Deputy Director for Economic Surveys and Indicators, said: “After strong pre-Christmas trading in November, retail sales fell across the board in December, with comments from retailers suggesting that ‘Omicron has had an impact on footfall.”
Figures show fashion stores were down 8% and department stores fell 6.3%, while food store volumes were down 1%.
Online sales were slightly higher as a proportion of the total, at 26.6%, than they were in November, at 26.3%, according to the ONS.
For all of 2021, retail sales rose 5.1% – a level of growth that hasn’t been higher since 2002.
However, this follows a 1.8% drop in 2020 when the pandemic took hold. Compared to 2019, annual retail sales last year increased by a more modest 3.2%.
Bethany Beckett, UK economist at Capital Economics, said retail sales data added to evidence that Omicron weighed on GDP in December.
She added: “With encouraging signs that the Omicron outbreak may have turned a corner and the government’s Plan B restrictions are due to be lifted next week, retail sales could recover some of that. fall in January and probably all in February and March.
“That said, with the cost of living crisis looming in the UK, we expect a weakening consumer recovery to further dampen retail sales.”
Households face highest inflation rate for nearly 30 years as energy bills soar while other commodities such as food and clothing also become more expensive as businesses pass on price pressures.
They should also be hit by a rise in National Insurance in the spring, while expected rate hikes by the Bank of England will increase the cost of monthly mortgage payments.
A GfK survey released on Friday showed consumer confidence this month fell to its lowest level since last February, when the country was under lockdown.
GfK Client Strategy Director Joe Staton said: “The UK’s financial pulse weakened further in January, due to concerns about personal finances and the general economic situation.
“Despite some good news regarding the easing of COVID-related restrictions, consumers are clearly bracing for soaring inflation, rising fuel bills and the prospect of higher interest rates. “