Retailers are bracing themselves for a possible slowdown in consumer spending this year, but the sector ended 2016 in (relatively) good health, thanks to a strong performance on Christmas week.
Like-for-like sales in UK retail increased one per cent year-on-year in December 2016, according to figures from the British Retail Consortium (BRC) and KPMG, improving from a growth of just 0.1 per cent in 2015.
Richard Lim, chief executive of Retail Economics, said the figures showed retailers had had a "solid yet unspectacular end to the year".
"In truth, most retailers will be quietly pleased with the performance given the bleak outlook cast over consumers in the immediate aftermath of the Brexit vote," Lim said.
"Nevertheless this is likely to be as good as it gets for a while. With inflation forecast to hit three per cent and the labour market already showing signs of weakening, real wages are expected to shrink this year."
The big success story was online. Internet sales were up 7.2 per cent year-on-year, and this had a knock-on effect for the high street, with total in-store sales falling 1.2 per cent.
Unsurprisingly, the focus of the month was the week before Christmas. Sales jumped 40 per cent in this week as compared to the other weeks in December. Retailers benefited from the timing of the big day, as it fell on a Sunday.
This performance meant Christmas week was bigger than the Black Friday sales period, the opposite of what happened the year before.
Helen Dickinson, chief executive of the BRC, said: "The challenge for retailers in 2017 will be to create real growth against a backdrop of growing inflationary pressures and persisting economic and political uncertainty."