LONDON Jan 6 A spending spree by British
shoppers in the week before Christmas failed to prevent sales in
December from falling short of the previous year's level,
industry data showed on Friday.
Robust growth in consumer spending has been one of the main
factors sustaining Britain's economy since last June's vote to
leave the European Union. But many retailers fear a squeeze on
spending as inflation begins to erode real earnings growth in
Like-for-like retail sales in December fell 0.1 percent year
on year, according to BDO, the accountancy and business advisory
firm. However, online sales in the month rose 19 percent year on
year, further evidence of a continuing shift in shopping habits.
"With such a weak base for December 2015 (when sales fell
5.3 percent) any further decline can only be seen as a poor
result for retailers," said Sophie Michael, head of retail and
wholesale at BDO.
"Coming at a critical juncture, this fourth negative
December in succession highlights the magnitude of the challenge
that lies ahead for 2017, when consumers will more keenly feel
the bite of inflation and the weaker pound," she added.
Sales of fashion goods declined 1.07 percent in December,
but the overall figure was pushed toward parity by like-for-like
increases in the lifestyle and homewares sectors, up 2.4 percent
and 2.6 percent respectively. Lifestyle includes gift and
BDO said that in the week leading up to Christmas Day sales
increased 11.7 percent year on year - the largest weekly growth
figure for the whole of 2016. However, the outcome partly
reflected Christmas Day falling on a Sunday.
On Wednesday clothing retailer Next, the first major
British retailer to give an update on Christmas trading, cut its
profit forecast for the current financial year and warned of a
further decline in 2017-18.
The British Retail Consortium is scheduled to publish
December sales data on Jan. 10. Official data for the month is
published on Jan. 20.
Next week will also see a raft of Christmas trading updates,
including from supermarkets Morrisons, Sainsbury's
and Tesco and from Marks & Spencer,
Debenhams and ASOS.
(Reporting by James Davey; Editing by Keith Weir)