UK Retail Sales Reach 9-Year High
Retail revenues in the United Kingdom rose at the fastest annual rate in nine years, as Christmas shoppers took advantage of year-end discounts.
Retail revenues rose 2.6 percent in December, the Office for National Statistics reported Friday. Year-on-year, retail sales soared 5.3 percent, more than double the median forecast of economists collected by Thomson Reuters. Excluding fuel, retail sales advanced 2.8 percent last month, translating into an annual gain of 6.1 percent.
Revenues in December were very much driven by small shops and department stores, official data showed. Sales at small shops rose 8.1 percent annually, while large department stores witnessed a 2.6 percent increase. Internet sales continued to rise across all sectors, a sign more retailers are investing in their websites. Internet sales rose 1.8 percent in December and 11.8 percent year-on-year. Coincidentally, internet sales accounted for 11.8 percent of all retail sales in December.
December figures offset weaker sales data in the first two months of the fourth quarter. Retail revenues fell 0.9 percent in October and barely increased in November, as slow wage growth continued to pressure consumer spending. UK consumers struggled with low wage growth and persistently high inflation for much of 2013.
After more than four years, inflation finally reached the Bank of England’s 2 percent target in December. As inflation continues to ease, consumer spending is likely to pick-up, especially in retail.
Strong retail sales are unlikely to propel fourth quarter GDP above the 1 percent mark, but will go a long way in offsetting stagnating industrial production and weak construction output in November.
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