Retail sales growth flatlined in December – the worst Christmas performance for a decade – according to an index.
Total retail sales showed 0% year-on-year growth in December, the British Retail Consortium (BRC)-KPMG retail sales monitor said.
This marked the worst December performance since 2008.
The report said retailers’ price cuts had seemingly not been enough to encourage shoppers.
On a like-for-like basis, UK retail sales decreased by 0.7% from December 2017.
In December 2017, total retail sales had increased by 1.4% year on year.
BRC chief executive Helen Dickinson said: “Squeezed consumers chose not to splash out this Christmas, with retail sales growth stalling for the first time in 28 months.
“The worst December sales performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger.”
She said the retail landscape is “changing dramatically” in the UK, while the trading environment remains tough.
She continued: “Retailers are facing up to this challenge but are having to wrestle with mounting costs from a succession of government policies – from the apprenticeship levy, to higher wage costs, to rising business rates.”
Paul Martin, UK head of retail at KPMG, said: “Retailers experienced little festive cheer this year, with total sales in December delivering zero growth on last year.
“This comes despite some retailers desperately attempting to generate sales through slashed pricing, which has seemingly not been enough to encourage shoppers.
“Growth in food did provide a glimmer of hope, being among the few categories to notice an uptick.
“However, the continued contrast in performance between the high street and online remained evident in December – albeit 2018 did also see a continued slowdown in online retail sales.”
Meanwhile, a separate report from Barclaycard said consumer spending grew 1.8% year on year in December, the lowest rate of growth seen since March 2016.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, showed that essential spending growth dipped to just 0.6% – the lowest figure recorded since July 2016 – caused by a contraction in supermarket spending.
Esme Harwood, director at Barclaycard, said: “Growth in consumer spending dropped to its lowest level since 2016 and represents a decline in real terms.”
She said consumers “remain cautious amidst ongoing economic uncertainty”.