UK Shoppers Rein In Spending As Brexit Nears

Lloyd Doyle
January 20, 2019

Total sales slid 0.9 percent compared to November, the Office for National Statistics calculated, with all sectors except food and fuel in decline.

The British Retail Consortium has said retailers had their worst Christmas in a decade.

James Smith, an economist at the City bank ING, said: "After another bumpy week for Brexit, today's United Kingdom retail sales data is a timely reminder that all is not particularly well in the United Kingdom economy".

"Following the increased growth in November, where shoppers snapped up more Black Friday offers as they continue to bring forward their Christmas shopping, retail sales weakened in December".

It is the biggest monthly drop since May 2017, and the December fall meant that retail sales were down 0.2% in the fourth quarter of the year - the largest three-month fall since March.

Supermarkets Sainsbury's and Morrison missed Christmas sales forecasts though Tesco beat them.

Retailers suffered a weak end to 2018 as Brexit uncertainty saw shoppers spending less in the face of Brexit uncertainty, the latest data shows today.

"Non-food stores was the largest contributor towards the decline seen in December 2018 for both the quantity bought and amount spent, at negative 1.1%", the ONS said.

The core retail sales in the United Kingdom dropped by -1.3% m/m in December. Despite the hype, reports of the death of the high street are greatly exaggerated.

But the picture is clouded by our changing shopping habits, in particular the rise of Black Friday.

However, Pantheon Macroeconomics chief economist Samuel Tombs pointed out that the monthly decline comes after sales lifted in November thanks to a Black Friday boost.

"Unless a Brexit deal is signed soon, there is unlikely to be much of a rebound in Q1 2019", Thomas Pugh, analyst at Capital Economics said.

Recent data from the GfK institute showed that consumer confidence in Britain fell to its lowest level in five years in December, as the purchasing power of wages was eroded by Brexit-fuelled inflation. Consumer spending that could have taken place in December likely to be freed to an extent when a decision is made on Brexit and consumers feel more relaxed about spending, Pugh said.

Other reports by Iphone Fresh

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