The retail recession

There was some relief for Rachel Reeves earlier this week when inflation fell slightly to 2.5 per cent and the economy just about managed to grow, by 0.1 per cent (although many were expecting it to be a little higher than that). 

There is no joy to be had, however, in this morning’s retail sales figures, which show that volumes fell by 0.3 per cent in December. It suggests that a modest recovery in retail over the past 12 months has run out of steam. Sales volumes were still up 1.9 per cent on December 2023, but this does little to offset the bigger picture: that retail sales have never recovered from the pandemic, and that the rise over the past 12 months does little to offset falls of 4.1 per cent and 2.9 per cent in 2022 and 2023 respectively. Retailers seem to be suffering their own long-term recession, even when the economy as a whole is keeping its nose above water.