Sales growth falls in November
Slower spending reported by BRC
December 10 2002
UK retail sales growth in November slowed to 2. per cent on a like-for-like basis, and by 4.9% on a total basis, compared with a year ago, according to the British Retail Consortium-KPMG Sales Monitor.
The BRC said November was a disappointing month for retailers but not surprising considering the strong comparatives from last year. There has been a gradual increase in sales of Christmas lines balanced by a slowdown in clothing sales. Homeware also performed poorly.
The star performer was entertainment; sales of DVDs continued to grow fast, while both music and video sales picked up due to gift buying. Books also sold extremely well, particularly celebrity titles.
Bill Moyes, director general of the BRC, said: “We expected November’s figures to be low, and so they are. This is mainly because regular interest rate cuts generated especially strong retail sales growth in November 2001. However, the underlying trend of sales growth remains positive. Christmas is likely to be satisfactory, but perhaps not spectacular. If that proves true, the case for a further cut in interest rates will strengthen.”
Bridget Rosewell, Chief Economic Adviser to the BRC, said: “These are the slowest results for two years. Like for like growth of 2 per cent means that average growth over the last eight months now stands at 3.4 per cent. This is further evidence that consumer spending is hardly out of control no matter what the concern on house prices. The Monetary Policy Committee should beware of being too blinded by the price of only one asset.”
Meanwhile, the Footfall Index measure of customer traffic for November showed a sharp increase over October, rising by 6.9 per cent month-on-month. The year-on-year rise over November 2001 was a more modest 0.5 per cent.
In the week beginning December 2, the Footfall Index showed a week-on-week rise of 4 .7 per cent over the last week in November, with the year-on-year increase just 0.1 per cent.
