Analysts were taken by surprise on Friday after the Office for National Statistics revealed retail sales fell by 0.1% after remaining flat in November.
Although the retail sales volume was up on December 2011's figures by 0.3%, this was the lowest year on year increase for a long time, excluding the December 2010 figures which were heavily affected by poor weather.
Most analysts were anticipating a small increase in retail sales on November 2012's figures, buoyed by Christmas sales, but it appears consumers were more cash conscious than experts were expecting.
The one ray of good news was in online sales, were positive, making up 10.6% of all retail sales in December 2012. This marked a fall of 0.1% from November 2012, but an increase of 1.2% compared with December 2011.
Internet sales usually fall at a much faster rate between these two months than seen this year. Feedback provided by retailers this month suggests that sales made via the internet helped to boost overall sales and provided a much greater proportion of sales in December than they were expecting.
Interestingly, petrol stations saw a year-on-year fall in both the quantity bought, (a drop of 6.6%), and the amount spent, (a drop of 6.7%). The prices of goods sold in this sector increased by 0.3% in the year to December 2012.
Specialist food stores (retailers which sell food other than supermarkets, such as butchers and bakeries) also saw the number of sales fall compared to December 2011, but supermarkets' sales remained flat.
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