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0.3 percent increase in retail sales for December

February 8, 2010 by admin  
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Figures have recently been released showing that in the month of December there was an increase of 0.3 percent in retail sales. Official figures proved disappointing when they showed that between November and December of last year retail sales grew by just 0.3 percent despite increased spending in the run up to Christmas.

The figures came in at significantly lower than expected, with many industry experts having predicted an increase of around 1 percent in retail sales levels for the period.

The slow increase in sales levels was put down partly to rising prices, with prices having increased at their fastest pace in nine months according to data. In terms of value retails sales for December compared to November were significantly stronger, coming in at an increase of 0.9 percent. In terms of value sales increased by 3.6 percent compared to December of the previous year.

The figures were released by the , and many economists expressed disappointment at the figures particularly since retailers had by and large given positive reports with regards to sales over the Christmas and New Year period.

Many were also surprised at the lack of impact that the Vat increase had on sales levels in December, as many had expected consumers to be rushing out to make purchases – particularly for big ticket items – before the level of Vat increased from 15 percent to 17.5 percent at the start of January. This followed a temporary reduction in the Vat rate, which was brought in at the start of last year.

Vicky Redwood from Capital Economics stated: “Sales should have received at least some boost from consumers bringing forward spending ahead of the VAT rise. Without this, sales would presumably have dropped. They are clearly a timely reminder that consumers shouldn’t be relied on to drive a strong economic recovery.”

Tags: retail sales levels, Christmas and holiday season, last year retail sales, Tax reform, Value added tax, Office for National Statistics, Late 2000s recession in Europe

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