According to British Retail Consortium’s chief executive, Helen Dickinson, the upturn in spending over Christmas gave retailers cause for cheer. However, she warns of challenges ahead for the sector.

She said: “Retail faces further headwinds in 2023. Cost pressures show little immediate signs of waning, and consumer spending will be further constrained by increasing living costs. Retailers are juggling big cost increases while trying to keep prices as low as possible for their customers.”

Food industry

Food and Drink sector performance, Susan Barratt, CEO, at IGD agreed: “December saw strong headline growth in food and drink sales, registering a notable acceleration over sales in November. With Christmas falling on a Sunday, the week ending Saturday 24th December delivered the biggest cash value ever recorded for a trading week in the sector. Despite this buoyancy, volumes in December were essentially flat, indicating that inflation continues to fuel growth. However, the flat volume number is an improvement on the rest of 2022, showing that Christmas still had the power to shift the direction of the market.”

She continued: “The festive season provided some light relief with IGD’s Shopper Confidence Index registering its highest levels since July 2022. With no Covid restrictions for the first time since 2019, shoppers in London were the catalyst for boosting sentiment with confidence improving to -12 in the capital, compared to -22 in November 2022. However, with the Office for Budget Responsibility predicting the greatest drop in living standards, shoppers will undoubtedly continue to adapt their shopping behaviour to help them save money in the new year.”