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UK retail sales drop dramatically in December

Published: 20 January 2017 - Jenny Wonnacott

Retail sales dropped by 1.9% in December, the biggest fall since April 2012, according to new figures released by the Office for National Statistics.

All main retail sectors saw a month-on-month decline, and the resulting drop far outweighed analysts' expectations of a 0.1% decrease following a 0.2% month-on-month increase in November. However, compared with a year ago, retail sales were up 4.3% in December, but this, too, fell short of the 7.5% forecasted.

ONS senior statistician Kate Davies said: "Retailers saw a strong end to 2016 with sales in the final quarter up 5.6% on the same period last year, although the amount bought fell between November and December once the effects of Christmas are removed. There were some notably strong figures from smaller retailers, in particular butchers, who reported a significant boost in sales in the run up to Christmas."

Results fell short of expectations for retail in December 2016
Results fell short of expectations for retail in December 2016

Online sales, which accounted for 15% of all retail sales, increased by 21.3% year-on-year, but fell 5.3% month-on-month. Average store prices went up by 0.9%.

Phil Mullis, head of retail and wholesale and partner at Wilkins Kennedy, commented: “It came as a surprise that December’s retail sales were slower than expected – going against many predictions from retail industry experts.

“However, looking back at last year’s figures, it looked to be a similar story. Perhaps it is the influence of event retailing in the run up to Christmas, such as Black Friday and Cyber Monday. If these fall in November then there is a chance that this could have an impact on quantity bought in the month of December.

“Retailers have worked hard to weather the storm following recent events, securing great relationships with suppliers in order to deliver the demands of the customer base. But they will need to batten down the hatches if they are to survive the upcoming changes to Living Wage and the Apprenticeship Levy on the horizon.”

Source: ONS

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