UK retail sales leap as shoppers boost pre-Xmas spending
LONDON- British retail sales jumped in November as shoppers bought more than expected ahead of Christmas, pointing to strong consumer demand boosting the economy as a whole into the end of 2015.
Stores reported strong demand from promotions in late November in the run-up to US-style ‘Black Friday’ promotions, the Office for National Statistics said, in contrast to more subdued numbers from industry group estimates.
Britain’s strong economic recovery over the past couple of years has been driven by buoyant consumer demand, helped by lower inflation and rising wages and employment.
But in contrast to the US Federal Reserve’s decision on Wednesday, the Bank of England has held off on raising interest rates while inflation remains near a record low.
Seasonally-adjusted retail sales volumes in November alone jumped by 1.7 percent from October — more than triple the 0.5 percent rise forecast in a Reuters poll — and sales on the year were 5.0 percent higher, also well above expectations.
For the three months to November as a whole, which also included strong September sales, sales were 5.3 percent up on the previous year, the biggest increase since March.
The underlying picture for British retail sales has been tricky to discern in recent months due to one-off effects linked to the timing of a late summer public holiday as well as this year’s ‘Black Friday’ sales promotions.
Britain’s biggest electricals and mobile phone retailer Dixons Carphone (DC.L), online retailer Amazon (AMZN.O) and upmarket department store chain John Lewis said that Black Friday had delivered record sales.
Black Friday discounts have only recently become common in Britain, and they have tended to concentrate into a few days sales which previously took place over several weeks in November and December.
Some economists before the data had said it was unlikely the ONS’s seasonal adjustment methods fully compensated for this.
The ONS said this year that retailers had reported sales being slightly more spread out in the days running up to Black Friday. The sample period for November’s retail sales ended on the day after Black Friday.
Previously the British Retail Consortium had said overall November spending at its members was up just 0.7 percent on 2014, the smallest November rise since 2011.
A comparable figure from the ONS showed 1.6 percent growth in the value of retail spending excluding fuel.
Part of the reason for weak top-line growth is falling prices for many goods, which the ONS said were down 3.3 percent from November last year. -Reuters