Unexpected dip in retail sales in December sends pound tumbling

A surprise December sales slump capped a nightmare week for Britain's beleaguered retailers today.

Official figures revealing a 0.3 per cent sales fall during the festive period dealt the latest blow to a high street reeling after the collapse of HMV, Blockbuster and Jessops in recent days. Some 10,000 jobs are at risk.

The figures hit the pound and confounded City hopes of a respite from the gloom, intensifying fears that the economy is poised to slip into an unprecedented triple-dip recession.

Nida Ali, the economic adviser to the Ernst & Young Item Club, warned: "The last couple of months have seen a visible loss of momentum in the retail sector, and today's figures are a continuation of that trend."

The disastrous month means the retail industry has seen its worst year-on-year growth – a paltry 0.3 per cent – since 1998 if the blizzards of December 2010 are discounted, the Office for National Statistics added.

The detailed data showed household goods stores such as DIY and electrical retailers worst hit, with sales volumes down 3 per cent over the month. "Other" stores – ranging from sportswear to jewellers – also dropped 1 per cent as non-food retailers overall saw sales slip 0.7 per cent.

Department stores grew sales 0.4 per cent, echoing the few bright spots in the sector, such as John Lewis, which reported another buoyant week today. In contrast with the widespread woes of bricks and mortar retailers, online sales were up 1.6 per cent and grew to 10.6 per cent of all retail sales over the month, up from 9.4 per cent a year earlier.