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'Black Friday' Lifts UK Retail Sales Growth to 10-Year High

British retail sales surged at their fastest annual rate in more than a decade in November, as U.S.-style "Black Friday" discounts drove record sales growth at electrical and department stores.
Oxford Circus in London | Source: Shutterstock
By
  • Reuters

LONDON, United Kingdom — British retail sales surged at their fastest annual rate in more than a decade in November, as U.S.-style "Black Friday" discounts drove record sales growth at electrical and department stores.

The figures suggest strong economic growth and a recent fall in prices for essentials such as food and fuel are finally starting to translate into higher morale among some households — a good sign for Britain's ruling Conservatives before May's national election, where cost of living issues are center stage.

Retail sales volumes 1.6 percent on the month to show 6.4 percent growth on the year, the fastest annual growth May 2004, the Office for National Statistics said on Thursday.

Economists had expected retail sales to rise 0.3 percent on the month after a similar increase in November, and for sales to be 4.4 percent higher on the year.

The British Retail Consortium had previously reported the fastest annual growth in high-street spending since August, as British stores adopted "Black Friday" promotions more widely than in previous years.

The ONS added that much "Black Friday" related spending in 2013 took place in December rather than November.

Electrical stores recorded a record 32 percent annual increase in sales volumes and department stores reported sales up by more than 15 percent — both the biggest increases since records began in 1988.

In recent years, relatively high inflation and stagnant wages have eaten into British households' disposable income.

But now falling prices for food and fuel are boosting the amount of goods that consumers can afford to buy, and wages have finally started to grow faster than inflation.

Official data on Tuesday showed that annual consumer price inflation fell to a 12-year low of 1 percent in November, and figures on Wednesday showed annual wage growth in October picking up to 1.8 percent from 1.5 percent in September.

On Thursday, the ONS said that the measure of inflation used to calculate retail sales growth fell by 2 percent, its biggest drop since August 2002.

This reflects cheaper food prices as supermarket chains such as Tesco and J. Sainsbury battle for business against discounters Aldi and Lidl, as well as a fall in the cost of a barrel of oil to its lowest in five years.

The ONS said that supermarket sales grew by just 1.5 percent on the year.

The Bank of England continues to expect consumer spending to be an engine for growth, after powering what looks set this year to be the fastest expansion in overall economic output in more than a decade.

By David Milliken and Andy Bruce.

In This Article

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