Gross domestic product (GDP) fell by 0.2 per cent in December 2021 to equal its pre-pandemic level in February 2020. This is a significant slowdown compared to the 0.7 per cent rise in November as shoppers got ready for Christmas early.
Overall, the UK economy grew by 7.5 per cent in 2021 – its biggest rise since 1941. However the decline in December meant growth in the fourth quarter fell flat at 1 per cent and quarterly GDP is now 0.4 per cent below pre-pandemic levels.
Wholesale and retail trade fell by 3.2 per cent in December 2021 and was the main contributor to the decline. The rise of the Omicron variant caused retail footfall to dip, with sales contracting by 3.7 per cent.
Shirley Leader, director of Petersfield-based woman’s clothing boutique, Velvet & Rose, comments: “December was tough for so many small high street businesses, but I believe we are through the worst of the pandemic economically. We now need people to be out and about in the UK and spending. Our retail shops have been through so much turmoil so we need to salvage this or we risk losing them for good. It will take many years to build our country up again and we need government support to get through this and the big challenges that we face such as Brexit, which is directly affecting our ability to fully trade with other countries.”
Jenny Blyth, owner of Storm In A Teacup Gifts, adds: “The day-to-day running of our small business is now like wading through treacle and we are fighting a tide of bad news in the form of rising energy bills, inflation and taxes. Despite the Omicron variant, we were lucky that most of our December events were still able to run. We were pleased that heading into January our sales were steady but as the cost of living crisis heightened, our sales have nosedived.”
Barry Whitehouse, owner at Banbury-based art shop, The Artery, concludes: “Footfall is visibly lacking in store and in town, and to be honest for the first time I am worried for the future of my shop. Takings in December were around 15 per cent down on the previous December but January and February to date have also been quiet. Rising prices and falling footfall mean much lower takings. January was around 50 per cent down on pre-pandemic levels and has left me wondering if I’ve just had my last Christmas as a bricks and mortar retailer. I seriously hope not and will do all I can to soldier on. My only hope is that the lighter evenings and warmer spring air will bring more people out shopping again.”
Read more detailed breakdowns on retail trade here: Retail sales, Great Britain: December 2021.