New research from GlobalData suggests UK retail spend will see a 3.4 per cent increase in the run up to Christmas, taking retail spend to around £110 billion in the fourth quarter of 2023.

However, the analytics company noted that the anticipated rise falls short of the same quarter of last year’s increase of 6.2 per cent and marks a second quarter of slowing growth in 2023.

“This year’s growth in retail sales is driven by inflation, which GlobalData expects to reach 9.3 per cent for the year as a whole,” said Nick Gladding, lead retail analyst at GlobalData. “Sharply higher prices mean shoppers will spend less in real terms than last year, choosing either to trade down or trim the number of presents they buy.”

Gladding added that sales growth in 2022 was supported by shoppers’ spending savings built up during the lockdown. Noting these savings are likely now depleted by factors including cost-of-living increases and mortgage rate hikes, he said consumers are now likely to shop “more cautiously and more savvily.”

GlobalData’s research also anticipates that food and grocery will grow faster than other sectors this year, with shoppers spending £2.8 billion – 5. 9 per cent -- more through the quarter than in 2022. This reflects the impact of price increases over the last 12 months outweighing any recent month-on-month declines, the company said.

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