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UK retail sales in December declined more-than-expected from the previous month when consumers were lured by Black Friday promotions, data from the Office for National Statistics revealed Friday.
Retail sales volume dropped by a more-than-expected 1.5 percent from November, when they grew 1 percent.
This was the biggest fall since June 2016 and the largest in seven years for the month of December. Economists had forecast a 1 percent fall.
Similarly, sales excluding auto fuel decreased 1.6 percent, in contrast to November's 1.1 percent increase. Sales were expected to fall 1 percent.
Rhian Murphy, ONS senior statistician, said consumers continue to move Christmas purchases earlier, with higher spending in November and lower spending in December than seen in previous years.
However, the longer-term picture is one of slowing growth, with increased prices squeezing people's spending, Murphy added.
On a yearly basis, retail sales volume including auto fuel grew 1.4 percent after rising 1.5 percent in November. The expected growth rate was 2.6 percent.
Likewise, excluding auto fuel, retail sales growth eased to 1.3 percent from 1.5 percent. This was also weaker than the expected 2.6 percent.
For the whole of 2017, retail sales volume increased 1.9 percent, the lowest annual growth since 2013.
James Smith, an ING economist, said real disposable incomes are likely to remain at best flat over the next few months and he sees very few catalysts for a recovery in spending.
The economist noted that whilst signs of skills shortages in certain sectors have prompted the Bank of England to forecast a sharp acceleration in wage growth, there is also a risk that some firms remain cautious as economic demand and other input cost pressures continue to bite.
