UK retail sales growth slows in December - BRC

LONDON Thu Jan 9, 2014 7:01pm EST

LONDON Jan 10 (Reuters) - British retail sales growth slowed in December despite signs of strong consumer confidence, industry data showed on Friday, raising questions about the durability of the recovery.

Capping a mixed holiday season for major British retailers, the British Retail Consortium said shoppers spent 1.8 percent more in December than a year earlier, slackening from annual growth of 2.3 percent in November.

Using a like-for-like measure which adjusts for changes in floor space and is favoured by many retailers and company analysts, sales were 0.4 percent higher on the year compared to a 0.6 percent increase in November.

"While confidence levels were higher than the previous year, this wasn't always matched by more money in pockets," BRC director-general Helen Dickinson said.

Food, clothing, electrical goods and health and beauty products were the biggest contributors to sales growth while sales of footwear and products for the home struggled.

Britain's economy has recovered strongly this year with annualised growth of 3 percent in the three months to September.

But the Bank of England and other economists are concerned about the sustainability of the recovery. Its main driver, household spending, has been funded by reduced savings while wages have been rising at less than half the rate of inflation.

BRC figures are based on sales in cash terms, rather than the inflation-adjusted measures that will feed into official fourth-quarter gross domestic product data due on Jan. 28.

Normally inflation would mean that the volume increase in retail sales is lower than the increase in sales values. But earlier this week the BRC reported that high street prices in December were 0.8 percent lower than a year earlier.

This means that the increase in retail sales volumes was probably higher than the 2.2 percent annual rise in sales values reported by the BRC for the fourth quarter of 2013.

The Office for National Statistics said that in the three months to November, retail sales volumes excluding automotive fuel were 2.5 percent up on a year earlier.

- For a FACTBOX summarising UK retailers' Christmas sales performance, see

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