GB: Retail Sales

Thu Dec 17 03:30:00 CST 2015

Consensus Actual Previous Revised
Month over Month 0.7% 1.7% -0.6% -0.5%
Year over Year 3.1% 5.0% 3.8% 4.2%

Retail sales comfortably surpassed expectations in November. A 1.7 percent monthly bounce was the second steepest since January 2014 and, with October's drop revised marginally smaller to 0.5 percent, lifted yearly growth from 4.2 percent to 5.0 percent.

Excluding auto fuel the picture was similarly robust with purchases also 1.7 percent higher than at the start of the quarter and 3.9 percent above their level in November 2014.

November's buoyancy was broad-based but a 4.9 percent jump in the value of online sales was particularly important. The survey period included 'Black Friday' but the effects of 'Cyber Monday' will appear in the December report.

Today's data put overall volume sales in the three months to November up a healthy 2.1 percent versus the previous period. This means that without a surprisingly sharp setback in December, fourth quarter retail sales will make a useful contribution to real GDP growth. That said, higher real sales have been at the expense of prices and the deflator was down 3.3 percent compared with a year ago. As such, the implications of for monetary policy of unexpectedly strong demand should be quite limited.

Retail sales measure the total receipts at stores that sell durable and nondurable goods. The data include all internet business whose primary function is retailing and also cover internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. Headline UK retail sales are reported in volume, not cash, terms but are available in both forms.

With consumer spending a large part of the economy, market players continually monitor spending patterns. The monthly retail sales report contains sales data in both pounds sterling and volume. UK retail sales data exclude auto sales.

The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps apparel sales are showing exceptional weakness but electronics sales are soaring. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.