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Spending by consumers in Great Britain dropped by almost 4% in December as the arrival of the Omicron variant kept people away from the shops, official figures show.
In a key month for retailers, sales volumes dropped by 3.7% in an across-the-board slump that included food, clothing and footwear, household goods and department stores.
Retailers had seen some Christmas spending brought forward to November when a 1% monthly rise was helped by Black Friday bargains.
Even so, the December fall was much sharper than the 0.6% drop forecast by the financial markets.
Bethany Beckett, a UK analyst at Capital Economics, said: “The huge 3.7% month-on-month fall in retail sales in December was much bigger than we and the consensus had expected and supports our view that the surge in Omicron Covid-19 cases in the run-up to Christmas may have dragged down GDP by 0.5% month on month, if not more.”
Beckett added that the 4.7% monthly drop in fuel sales was consistent with people staying at home rather than risking a trip to the high street.
The Office for National Statistics (ONS) said the monthly fall in the last month of 2021 still left retail sales 2.6% above their pre-pandemic level in February 2020.
Heather Bovill, the ONS deputy director for surveys and economic indicators, said feedback from retailers showed a clear Omicron effect.
“As plan B restrictions in England meant more people working from home, there was a notable fall for fuel sales.
“However, despite the fall in December, retail sales are still stronger than before the pandemic, with over a quarter of sales now made online.”
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In 2021 as a whole, the volume of retail sales rose by 5.1%, the highest annual growth since 2004, but the ONS said the figures should be treated with caution because of the fall in high street activity during 2020.
Over the three months to December 2021, considered by the ONS to be a better guide to the trend than monthly comparisons, retail sales volumes were down 0.2% on the previous quarter, and 0.9% lower than in the final three months of 2020.
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