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UK Preview: Retail sales seen contracting month on month in December

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The ONS will publish UK retail sales data for December today at 9.30 GMT. Retail sales are expected to fall sharply in December. Month on month, it is expected to drop 0.3 per cent as against 1.7 per cent rise seen in November. Year on year, retail sales can be expected to rise 4.3 per cent, down from 5 per cent rise seen in November. BBC reported a survey by the business lobby group, the CBI, according to which UK retail sales grew more weakly than retailers expected in December and the outlook for January sales figures is not strong. Some economists expect retail sales for December to be the lowest since May 2012.

    Shopping on Black Friday had helped sales volume (including and excluding fuel) to increase 1.7 per cent in November. However, even Black Friday could not bring in sales figures that were being expected by retailers. UK retail sales grew weaker than retailers’ expectation in December and Barry Williams, the CBI's distributive trades chairman stated that retailers expect 2016 to start in "much the same vein".

    Last month, though the balance of retailers saw a considerable rise in sales which is believed to be better than the figure stated in November, economists’ expectation is likely not have been met. However, December can count on Cyber Monday sales which will be taken into account while calculating the sales figures. Retail sales have also possibly been helped by the holiday season and also the drop in oil price to multi year low.

    The research team at TDS however sees an upside risks to retail sales in December. They agree that the warm weather has caused sales of apparels to dip thereby hurting the total sales figure for the month. They however believe that the negative impact of the fall in apparel/clothing sales will be offset by other driving factors. TDS thus believes that the increase in retail sales (in percentage) will remain above zero contrary to the market expectation of 0.3% fall month on month in December.
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