U.K. Retail Sales Extend Worst Run on Record Despite Discounting
Friday, 17 January 2020 16:47 WIB |
ECONOMY |UK Retail Sales
U.K. consumers stayed away from the stores during the key Christmas trading period, despite widespread discounting and a break in the political impasse over Brexit.
The volume of goods sold in stores and online fell 0.6% in December, confounding expectations of a 0.6% increase. Sales excluding auto fuel dropped 0.8%.
The figures, which include Black Friday and Cyber Monday, will stoke speculation that Bank of England policy makers could cut interest rates this month for the first time since the aftermath of the Brexit referendum.
Weak growth and inflation figures this week have added to expectations fueled by dovish comments from BOE Governor Mark Carney and other policy makers. Traders are now pricing in a more than 60% chance of a cut on Jan. 30.
Retail sales have fallen or stagnated in each of the past five months, the longest run without growth since records began in 1996, the Office for National Statistics said Friday. A 1% decline in the fourth quarter was the largest since the start of 2017 and weighed on the economy.
The sales survey was taken between Nov. 24 and Dec. 28, meaning much of it encompassed the period following Boris Johnson's commanding win in the Dec. 12 general election. His victory means Britain is on course to leave the European Union on Jan. 31.
Stores widely reported having to offer deep discounts to beat off competition and lure customers in the run-up to Christmas. Prices as measured by the retail sales deflator fell 0.6% on the month.
That™s hit stores from Marks & Spencer Group Plc to John Lewis Partnership Plc, while the British Retail Consortium described 2019 as the worst year on record for the sector with revenue down on 2018. Retailers have underperformed the U.K. market as a whole this year.
Sales in December fell across the board, with non-food sales declining 0.9% and food sales dropping 1.3%, the most since December 2016. Petrol stations and online retailers had a better month.
There were also sweeping declines during the quarter, with clothing and footwear down 2.3% and non-store retailing falling 3.2%.
Source : Bloomberg