U.K. Retail Sales Surge Amid Black Friday Discountingby
Black Friday boosts department stores, household goods' sales
Figures underscore consumer-driven nature of U.K. economy
U.K. retail sales rose more than economists forecast in November as Black Friday discounts boosted department stores and spending on household goods.
Sales volumes increased 1.7 percent from October, when they fell 0.5 percent, the Office for National Statistics said in London on Thursday. Economists in a Bloomberg survey predicted a 0.6 percent gain. Excluding auto fuel, sales also gained 1.7 percent.
Price cuts in the week leading up to Black Friday on Nov. 27 helped lure shoppers, with sales at department stores rising 3.4 percent -- the biggest monthly gain in almost two years -- and household goods jumping 4.1 percent. Food sales rose just 0.8 percent.
The figures underline the extent to which growth is being driven by domestic spending as the global slowdown weighs on manufacturing and exports. That’s in part due to the boost to real incomes from near-zero inflation. Retail prices excluding auto fuel, measured by the annual deflator, dropped 2.3 percent in November, the most since 2002.
The pound was trading at $1.4915 as of 12:02 p.m in London, down 0.6 percent on the day.
The Bank of England held its benchmark interest rate at a record-low 0.5 percent this month and officials have indicated they are in no hurry to follow the Federal Reserve, which raised the key U.S. rate for the first time in almost a decade on Wednesday.
“Consumers are unlikely to face the burden of a rise in interest rates until the end of 2016 at the earliest,” said Martin Beck, senior economic adviser to the EY ITEM Club. “In the long term, rising inflation and cuts to the welfare budget will act as headwinds, but retailing should continue to be one of the bright spots of the U.K. economy.”
Sales rose 5 percent from a year earlier, and by 3.9 percent when fuel is excluded. Total sales are set to contribute to growth in the fourth quarter, with volumes up 2.1 percent in the three months through November and by 5.3 percent from a year earlier, close to the strongest annual growth in 11 years.
Internet sales made up 15.2 percent of total sales in November, the highest share since records began in January 2008.
The ONS carried out its data collection between Nov. 1 and Nov. 28 and therefore Thursday’s report doesn’t include so-called Cyber Monday, normally a big day for Internet sales.