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UK Dec retail sales disappointing


Volumes down 0.1% m/m; Moody’s forecasts further pain

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UK retail sales for December fell 0.1 percent in month-over-month terms, the Office for National Statistics (ONS) said on Friday.

Non-food retail, especially sales of household goods, fell by 3 percent; the highest monthly fall on record since January 2010, the ONS said. Food sales also fell 0.3 percent on the month, adding to the overall weakness in retail sales data for December.

On an annualised basis, sales rose by a mere 0.3 percent over December 2011. The figure was the lowest since April, the ONS said. Lending credence to current market conjecture about changing consumer habits, the ONS said online and other types of ‘non-store retail’ sales grew nearly 12 percent year-over-year in December.

Commenting on the news, Philip Shaw, UK economist at Investec, said, "The high street seems to have stalled again over the past few months. Recovery prospects will depend strongly on a pick-up in consumer activity over the first few months of 2013."

Meanwhile, in a report published on Friday, ratings agency Moody’s forecast low to flat retail sales growth in the UK, France and Germany and contracting sales in Southern Europe in 2013.

Specifically on the UK retail market, Yasmina Serghini-Douvin, senior analyst in Moody's corporate finance group, said, "While easing commodity prices should help the earnings of clothes retailers like NEXT and Marks and Spencer in 2013, weak consumer spending will continue to weigh on the sector."

Online spending was again the bright spot of the holiday season, supporting retailers' sales growth across various categories, although growing from a generally low base, she added.

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UK Dec retail sales disappointing
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