The UK is now officially in recession for the first time since 1991, according to the Office for National Statistics (ONS), which also revealed that retail sales values dropped during December.
Retail sales values in December fell by 0.8%, based on non-seasonally adjusted data, compared to the previous year, said the ONS. This is the biggest fall since records began in 1986.
Gross Domestic Product (GDP) also fell by 1.5% in the fourth quarter of 2008, after a decrease of 0.6% in the third quarter. The definition of a recession is two consecutive quarters of falling economic growth.
For non-food stores, the non-seasonally adjusted value of retail sales in December also dropped by 3.6%, compared to the previous year.
The ONS said it advised people to focus on the non-seasonally adjusted estimates of volume because of exceptional factors affecting December’s seasonally adjusted figures. These factors include the VAT change, earlier start of sales and vigorous price discounting, and an exceptionally late 5-week reporting period.
The average weekly value of sales in December was £6.7 billion.
BRC director general Stephen Robertson said: “The official figures are now painting a more realistic picture of how tough conditions are for customers and retailers. A triple whammy of dramatically declining sales, margin-crushing discounts and rising costs hit non-food retailers hardest overwhelming some businesses and destroying retail jobs.”
However, the bright spark during December was online, as the average weekly value of internet retail sales during December was £238 million, according to the ONS. Internet sales now represent 3.5 per cent of total retail sales, compared with 2.8 per cent in June last year.