Black Friday shopping spree boosts retail sales

Retail sales viewed on a rolling three month basis, in November were up 0.8 per cent the ONS data reveals

Retail sales viewed on a rolling three month basis, in November were up 0.8 per cent the ONS data reveals

"It was a month of two halves, with a slow start followed by sales ramping up in the final few weeks as retailers kicked off their Black Friday and Christmas promotional activity in earnest". Consumers have been squeezed through most of this year by rising inflation which hit its highest in almost six years last month, at a time when wages are failing to keep up. Spending in cash terms was 4.7 percent higher.

That led economists to suggest the rise in sales may be temporary: Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said the surge does "not signal broader consumer strength".

The somewhat promising retail figures come ahead of the Bank of England's interest decision decision today.

Black Friday boosted high street sales and helped retailed post'reasonably strong results in the run-up to Christmas
Black Friday boosted high street sales and helped retailed post'reasonably strong results in the run-up to Christmas

Ruth Gregory at Capital Economics said: "We would not get too carried away by the figures. Households will simply borrow a little more and save a little less to smooth out their consumption", he said.

The ONS said feedback from retailers suggested that promotions geared towards the USA post-Thanksgiving "Black Friday" phenomenon had contributed to the monthly increase, with household goods stores among the best performing.

"The official data are failing to fully adjust for the new seasonal pattern generated by Black Friday, which only gained traction in the United Kingdom three years ago", he said.

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But the picture was less rosy when comparing the past three months with the same period a year earlier - smoothing out monthly volatility.

"The surge in retail sales in November does not signal broader consumer strength". When the BoE raised interest rates on November 2, it forecast real-terms household consumption growth would slow to 1 percent next year from 1.5 percent predicted for this year as demand shifted towards business investment and exports.

However, average store prices increased by 3.1% in November compared with the same time previous year, with shoppers feeling the 3.6% rise in food prices - the highest rise since September 2013. The consensus was for a 0.3% rise on the year.

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"Household goods stores had a good November, with a number of businesses saying that Black Friday promotions boosted sales". But home furnishings company Carpetright cut forecasts after warning of fragile consumer confidence.

But she added that with inflation likely to fall back and some survey evidence of pay growth picking up "there should be some scope for retail spending volumes to pick up more momentum in the New Year".

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