ONS: UK retail sales hit by big freeze in December

| January 21, 2011 | 0 Comments

The Office for National Statistics (ONS) has today reported UK retail sales were hit by the severe wintry weather in December and rising prices.

According to the ONS, retail sales during December were down by 0.8% from the previous month - much worse than expected.

It was the worst annual performance for any December since records began in 1988.

While there was demand for winter clothing, sales of food and fuel fell - which was attributed to the poor sales growth.

There have been concerns that consumer spending will be weak this year – as a result of the Government’s spending cuts and rising unemployment, which is squeezing households.

However, the VAT rise which came into effect earlier this month is also expected to hamper spending.

Today, the John Lewis Partnership, which is regarded as a barometer of British retailing, revealed sales slowed in the week to 15 January – attributed to the VAT hike from 17.5% to 20%.

Meanwhile, in other news today, the IMRG Capgemini e-Retail Sales Index today revealed that December’s wintry weather meant a surge in internet sales.

While the High Street suffered as consumers opted to stay at home, internet sales surged 25% in December (compared with December 2009) to £6.8 billion, with the sale of clothing, footwear and alcohol particularly strong.

UK shoppers spent a total of £58.8 billion online in the 2010 year – 18% higher than in 2009 – and more than forecasts of a 13% rise.

The Met Office recently confirmed that December was the coldest month since records began 100 years ago.

Today’s figures are further evidence that fourth quarter economic growth is likely to slow.

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