Tags: UK | retail | sales | recovery | hopes

Slip in U.K. Retail Sales Hurts Recovery Hopes

Thursday, 17 Dec 2009 04:53 PM

British retail sales fell in November for the first time in six months, reducing hopes of a strong economic recovery, according to official figures released Thursday.

The Office for National Statistics said sales volumes are down 0.3 percent between October and November — the first month-on-month fall since May.

Sales were hit by a poor performance from department stores, where sales fell by 4.4 percent — the biggest decrease since records began in 1988. Clothing and footwear sales also fell by 1.8 percent.

November's year-on-year sales are still 3.1 percent higher than last year when the financial crisis was at an acute stage, but analysts warned that trading conditions remained difficult.

"Not only do November's official UK retail sales figures show a drop in high street spending, but timelier anecdotal evidence suggests that December got off to a slow start too," said Vicky Redwood at Capital Economics.

The British government cut the value-added tax rate from 17. 5 percent to 15 percent rate in December 2008 to stimulate consumption. Redwood suggested retailers may see a last-minute surge in trading as shoppers try to take advantage of the reduced rate before it rises to its original level in January.

"Admittedly, spending should still receive a boost just before the end of the year, as consumers bring forward spending before the VAT hike," she said. "But this will just make for a weak January."

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British retail sales fell in November for the first time in six months, reducing hopes of a strong economic recovery, according to official figures released Thursday. The Office for National Statistics said sales volumes are down 0.3 percent between October and November ...
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