UK retail sales decreased in December on year-on-year basis. The gifts rush among British consumers in the week before Christmas failed to stop the decline in retail sales compared to the same month last year. The steady growth in consumer spending was one of the main factors supporting the UK economy after the vote for leaving the European Union in June. Many retailers, however, are afraid of the cost containment as inflation begins to negatively affect the real wage growth in 2017.
Given on the low base in December 2015 (when sales fell by 5.3%) each new decline can only be seen as a bad result for retailers. It happened at a critical time, this fourth consecutive December with negative data, highlights the scale of the challenge that lies ahead in 2017, when consumers will feel stronger inflation and a weak pound.
The online sales, however, grew by 19% yoy, which is another proof of the continuing change in shopping habits.
Sales of fashion goods fell by 1.07% in December, but due to annual growth of lifestyle sector and household appliances respectively by 2.4% and 2.6%, was achieved partial parity. In the lifestyle catalog includes gifts and technological devices.
In the week before Christmas, the sales increased by 11.7% yoy, which is the biggest weekly increase throughout 2016.
On Wednesday trader of fashion goods retailer Next cut its forecast for profit for the current financial year and warned of another downturn in 2017-2018.
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