A surprising level of growth of 5.3% over the previous year suggests the retail sales for December far exceeded that of many industry analysts. The figures, provided by the Office for National Statistic (ONS) prove that people are, as many commentators have surmised, more willing to part with their money, and that this can only be good for the economy. Even more surprising is the evidence that it may not be the bigger chains that are responsible for the growth, but rather smaller stores in the high street.
Speaking to the BBC, Kate Davies, from the ONS, said:
“It’s the small stores that are very much driving growth – they are seeing a consistent gain of 8% annual growth, while large stores are seeing 2.6% growth.”
Notably, some of the more mainstream supermarkets such as Tesco, Morrison’s and Sainsbury have reported disappointing
figures for the end of year period, in direct contrast to the more specialist stores offering bespoke products. In recent years there has been a certain move towards cheaper supermarket brands, although it has been noted that high-end food and drink sales returned a healthy revenue during December.
One leading economist, David Tinsley of BNP Paribas, noted that plentiful discounted goods in supermarkets may also have had a direct effect on the figures:
“UK retail sales showed spectacular and surprising strength in December, as discounting by stores drove a huge increase in the volume of sales. The size of the jump in retail volumes is somewhat surprising against surveys of retailers and consumers which have not looked so strong, and fairly mixed Christmas trading reports from retailers.”
The reported growth in the UK economy overall, as suggested by government bodies in the latter part of 2013, looks more realistic now after the results of December, although it remains to be seen whether the enthusiasm for spending in the festive season translates into a year-round increase in retail sales.
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