**MNI: 5 Things We Learned From UK Retail Sales Data

By Laurie Laird and Jamie Satchithanantham

     **LONDON (MNI) - The following are the key points from the ONS' retail

sales data published Friday by the Office for National Statistics.

     - As highlighted in MNI's 5 Things to Look Out For preview, sales volumes

continued the trend of falling short of market expectations in December.

December sales were the worst in seven years. On a monthly basis total sales

were down 1.5%, the worst outturn since December 2010 when volumes fell 2.0%

m/m. On a ex-fuel basis sales were down 1.6% in December the joint-lowest

outturn since March 2013. 

     - The retail sales sector will contribute modestly to Q4 GDP, with strong

sales in November, assisted by "Black-Friday" spending offseting a plunge in

sales in December. Sales volumes were down 1.5% in December, following 1.0% rise

in November, to leave the sector up 0.4% up on the quarter. That means retail

sales will contribute 0.02pp to Q4 GDP.

     - If December was bad, 2017 overall was worse. Sales volumes grew at the

slowest annual pace since 2013, falling spectacularly from a rate of 4.7% in

2016 to a measly 1.9% in 2017. This was the first deceleration in annual sales

growth since 2010.

     - Consumer habits are changing, with shoppers spreading holiday buying more

evenly over the final two months of the year. Non-seasonally adjusted monthly

sales growth eased to 11.2% in December of 2017 from 17.6% in 2013.

     - Internet sales accounted for a higher proportion of total sales in

December (17.2%) than in November (16.7%) and December 2016 (15.8%). Despite the

rise, that remains below the record-18.1% notched in June 2017 and does not

suggest online sales rocketed over the festive period. Note that this data only

captures sales values, as the ONS does not record volume-based online sales.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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