UK retail sales preview: Christmas sales are set to fall

Mario Blascak, PhD Independent Analyst

Traditionally, the pre-Christmas period is a gold mine for shops as many people in the nowadays western societies often leave the Christmas presents for the last moment. This tradition is making a case for the retail sales to be boosted strongly in the month of December, but with the UK retail sales report due on Friday, January 19, the opposite is the case.

The UK retail sales are expected to fall 0.6% over the month in December after rising strong 1.1% in November. While over the month the retail sales are seen falling, they are still expected to accelerate to 3.0% over the year.

After excluding the sales of motor fuel the retail sales are seen falling even steeper by 0.8% over the month in December while rising also by 3.0% over the year.

While the UK economy is hammered by a post-Brexit squeeze on UK consumers, there is a perfect case to serve as an explanation to expected deceleration with high comparison base in November and fewer number of working days.

The UK retailers confirmed that “Black Friday” events contributed to the monthly increase in household goods stores, with electrical household appliances making the largest contribution to the 1.1% m/m growth back in November.That is the reason why the volume of monthly sales will be lower in December as the number of working days before Christmas is lower compared to November boosted by “Black Friday” discount sales.

The pattern of retail sales in the UK in last three years also confirms that sales tend to fall in December with retail sales falling -1.0% m/m in December 2016 and falling -1.9% in December 2017.

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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