Brexit latest: United Kingdom retail sales fall sharply in December

Brittany BishopJan 21, 2017

United Kingdom retail sales volumes fell sharply in December with a decline of 1.9% for December, which dragged the annual increase down to 4.3% from 5.9% previously as the November increase was revised to show a 0.1% decline from the original 0.2% gain.

According to the latest retail sales report from the Office for National Statistics (ONS), the total value of furniture and lighting sales slowed to 1.3% in December 2016, down from 5.2% in November.

The decline was the biggest seen in nearly five years and bodes ill for things to come.

During the three months ended December, retail sales dropped 0.3 percent as compared to the previous three-month period.

Retailers had a "disastrous December", said another analyst, Alan Clarke of Scotiabank.

The statistics agency said the largest contribution to the monthly decline came from non-food stores, which accounts for department stores, clothing and household goods.

Retailers, including Sainsbury's, Majestic Wines, Morrisons, Aldi and others have all reported an increase in sales, with the British Retail Consortium (BRC) reporting United Kingdom retail sales increased by 1.0% on a like-for-like basis from December 2015.

PwC adds that while many retailers have reported apparently strong like-for-like sales, "it is worth adding a note of caution around comparability". However, despite the dip, the ONS says the underlying trend remains one of growth with the three-month on three-month movement in the quantity bought increasing by 1.2%.

"This is likely to be the theme for the rest of the year - higher prices will reduce disposable income and hurt consumer spending growth".

The results also reveal the store prices are beginning to rise as inflation hits the shelves, a likely contributing factor to the decrease in sales volumes from November.

The annual rate stayed below the expected 7.2%. Reacting to the latest United Kingdom retail sales figures, Andy Lyon, retail & consumer partner at PwC says, "The last few retail sales figures have shown that United Kingdom consumers have remained resilient following the outcome of the European Union referendum and the associated uncertainty".

'It doesn't really matter to a retailer whether they generate revenue in November or December, ' he said. Sales volumes, excluding fuel, were 1.4 per cent higher in the fourth quarter than the third quarter.

Average store prices increased by 0.9% on the year, as higher import costs - due to a weaker post-Brexit pound - were passed onto consumers.

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