The latest official figures support the view that British national output shrank in the fourth quarter and point to a gloomy consumer mood that has shut three well-known chains since the beginning of the year (including 92-year-old music retailer HMV HMV.L.).
The Office for National Statistics said sales volumes including automotive fuel fell 0.1% on the month to give an annual rise of 0.3%. Economists had forecast a 0.2% monthly increase.
The annual rise was the smallest since April and far below a forecast 1.1% rise.
The main driver behind the monthly fall in sales was non-food retail, chiefly sales of household goods which dropped 3% – the biggest fall since January 2010, the ONS said. Also contributing to the weakness is food sales, which fell 0.3% on the month.
Consumer spending in Britain has taken a hammering from a combination of below-inflation wage growth, worries about the economy and government austerity measures.
Still, trading updates from six major British retailers on Thursday demonstrated that must-have gadgets, cheap fashion and internet sales were key to overcoming an otherwise tough festive season.
The official data showed online and other types of non-store retail grew almost 12% on the year in December. The share of internet trading continues to rise, and one industry survey has forecast it to grow another 12% this year to 87 billion pounds.
Boding ill for quarterly GDP numbers in the last quarter of 2012, retail sales fell 0.6% between October and December compared to the previous three months – the biggest fall since August 2011.
The figures follow another survey by the British Retail Consortium, which showed that the total value of goods sold in December was up just 1.5 percent on the year.
The ONS said retail sales excluding fuel fell 0.3 percent on the month and were 1.1 percent higher than in December 2011, compared to economists’ forecast for rises of 0.1 percent on the month and 2.1 percent on the year.
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