UK Retail Sales Decline in December

Retail sales figures in the United Kingdom for the month of December fell 1.9 percent from the previous month, according to the latest data released by the government.

Sales across all main retail sectors went down, with non-food stores accounting for the biggest contraction, the Office for National Statistics (ONS) said.

The latest retail sales figures represent the heaviest monthly fall in over four and a half years.

Some analysts attribute the December plunge to heavy Black Friday discounts given by retailers in late November. They point out that November figures were boosted because of the discounts and that December numbers slumped because shoppers lost the incentive to shop.

Also severely impacted by the shopping decline were household goods, footwear, and clothing.

Experts had forecasted a much smaller monthly decline at 0.1 percent.

With inflation figures showing an increase in retail prices in December, analysts are expecting the rest of the year to chart a downward path as higher prices are bound to negatively impact disposable income and consumer spending.

Compared to last year, however, UK retail sales in December are actually up 4.3 percent, and while main sectors saw their sales drop, smaller retailers like butchers have reported sizable boosts in sales during the holidays.

In related news, the ONS found that online shopping in the UK in December rose with consumers buying roughly £1 billion worth of goods and services from ecommerce websites and apps, representing a 21.3 percent rise compared to the same month last year.

Bank of England governor Mark Carney, this week, said that household spending remained strong, but cautioned that the UK economy was becoming a bit too dependent on consumer spending for economic growth.

The UK economy is among the world’s fastest-growing advanced economies in 2016, but the Bank of England expects growth to slow this year as higher prices and a weaker currency will likely adversely impact consumer spending in the near term.

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