FALLING real wages meant shoppers continued to see more of their spending power absorbed by essential items such as food in the key festive trading month of December, leaving less money for gifts, industry figures signal.

The British Retail Consortium’s (BRC’s) latest monthly monitor shows the value of UK retail sales in December was up by 1.4 per cent on the same month of 2016.

This was slightly adrift of the 12-month average year-on-year rise of 1.5 per cent.

BRC chief executive Helen Dickinson said: “Growth in spending was in line with the albeit modest average for the year. However, the divergence between growth in sales of food and non-food has never been so stark. With inflation outpacing income growth, shoppers continued to see more of their spending power absorbed by essential items, including food, leaving less left over for buying Christmas gifts.”

She added: “That made [the] festive period all the more nail-biting for non-food retailers, many of whom offered deep discounts in the last weeks before Christmas.”