Last month's news that UK retail sales volumes had fallen by 3.2 per cent in December, the worst monthly fall since the pandemic-hit January 2021, was an important reminder that retailers still face many challenges despite softening inflation and rising real wages supporting consumption.
Part of the story was that consumers got Christmas shopping done early because of the timing of Black Friday sales. But cost-of-living pressures are continuing to cause problems for the sector, with factors such as elevated energy bills and higher housing costs playing an understandable part.
Currys (CURY) noted in a recent update that a record 21 per cent of customers are using its credit scheme to fund purchases as purse strings remain tight. The struggling electrical retailer may have guided for a consensus-beating full-year profit, but this was driven by cost savings rather than robust Christmas trading, as it highlighted weaker trends for its TV and computer sales.