Official data from the Office for National Statistics revealed a fall in retail sales in the run-up to Christmas. Sales volumes in November fell by 0.4% compared with the previous month, while annual growth of 0.7% was recorded over the year. Sales values (non-seasonally adjusted and excluding fuel) grew by 3.3% compared with November last year in contrast to the BRC figures released earlier in the month which showed growth of just 0.7%. The ONS said small retailers continued to outperform the market while their series for internet sales also revealed strong growth. They now estimate that online sales now account for 12.2% of total retail sales, the highest ever recorded in the series. The performance of small retailers and online sales is likely to explain some of the difference between the two measures, however, the last two months has seen a wide divergence in the two measures.
Total retail sales values grew by just 0.7% in November according to the latest figures from the British Retail Consortium. On a like-for-like basis sales growth fell by 1.6% marking the worst performance since May, driven down by poor clothing and footwear sales and underlying uncertainty about jobs and incomes. Food sales growth (measured as a 3-month rolling average) fell marginally to 4.6% from 4.9% in the previous period while non-food sales declined by 0.5%. The non-food non-store measure (internet, mail-order and phone) recorded growth of just 8.6% year-on-year. This time last year non-food non-store growth was 17.6%.
These figures are just the latest in a string of poor economic data that have been released over the last month. The strength of the recovery has weakened markedly driven by rising unemployment, weak consumer and business confidence and the continued squeeze on household disposable income. The outlook for the sector is set to intensify as austerity measures are ramped-up with welfare payments being frozen and public sector pay rises capped at 1 % for two years following the freeze.
The Chancellor, George Osborne, delivered news last week that the OBR now expect growth of just 0.9% in 2011 and 0.7% in 2012, marking significant revisions from 1.7% and 2.5% respectively. This came after news from the Organisation of Economic Co-operation and Development (OECD) warned that the UK economy is heading for a double-dip recession. Although the Chancellor was quick to point out that the OBR do not expect the UK to return to recession, he conceded that the current structural deficit will not be eliminated until 2016-17, two years later than the government hoped.
Which measure of retail sales is the best? Here is an article comparing the ONS’s Retail Sales Index and the BRC’s Retail Sales Monitor.