LONDON Jan 10 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