MNI DATA ANALYSIS: UK Q4 Retail To Exert Modest Drag on GDP>

-UK Q4 Sales -0.2% q/q; to subtract -0.01 percentage point from Q4 GDP

-UK Dec total sales -0.9% m/m, +3.0% y/y 

By Laurie Laird and Jai Lakhani

     LONDON (MNI) - A sharp fall in December retail sales pushed the 

sector into the red for the fourth quarter, leaving retail poised to 

exert a modest drag on gross domestic product in the closing months of 

2018. 

     Volumes decreased by 0.2% between October and December, after a 

0.2% gain in the third quarter.  That means retail sales could subtract 

0.01 percentage point from fourth quarter gross domestic product, 

according to a National Statistics official. 

     Sales slumped by 0.9% in the month of December, rising by 3.0% over 

the same period a year earlier, compared to the MNI median forecast of 

-0.8% monthly decline and a 1.4% annual rise. 

     While late 2018 sales fell short of economists' forecasts, the 

modest decline in the fourth quarter failed to confirm some retailers' 

apocalyptic warnings of a high street bloodbath over the Christmas 

period. 

     Sales at the "Other Stores" category plunged by 6.3% between 

November and December, with purchases of carpets and floor coverings 

accounting for much of the weakness. A National Statistics official 

declined to comment on whether the slump in carpet sales was linked to a 

softening of the housing market. 

     In value terms, sales declined by 0.1% in the fourth quarter, the 

biggest fall since the final three months of 2015. Excluding fuel, 

retail sales values decreased by 0.3% in the three months to December, 

the joint-biggest slump for a calendar quarter since March of 2010. 

     Internet sales increased by 9.3% between November and December, the 

smallest monthly gain since November of 2017, pushing the portion of 

on-line sales to 18.1% of total  transactions from 18.2% in November. 

     November sales were revised to show a 1.3% monthly increase and a 

3.4% annual gain, worse than the originally-reported 1.4% monthly surge 

and 3.6% yearly improvement. 

     The implied price deflator rose by 0.6% in the year to December, 

the smallest gain since November of 2016. 

     Excluding fuel, sales declined by 1.3% last month, rising by 2.6% 

over December of 2017, compared to the MNI median forecast of a 0.7% 

decline on the month and a 1.2% annual gain. 

     November non-fuel sales were also weaker than originally reported, 

rising by a revised 1.0% from October and increasing by 3.5% over 

November of 2017. Excluding fuel, sales growth was originally reported 

as up 1.2% between October and November and a 3.8% gain over the 

penultimate month of 2017. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]