UK retail sales increase at strongest rate since February 2010 in December

Christmas was a pretty mixed bag for some retailers, but figures from the Office for National Statistics suggest that the squeeze on consumers is easing, and they were able to make the most of bargain and discount shopping.

December retail sales jumped 5.3 per cent from a year earlier, up 2.6 per cent in the month - the fastest rise since February 2010.

(ONS)

The numbers are much better than expected. Analysts had predicted a 2.6 per cent rise year-on-year.

Howard Archer of IHS Global Insight says that, following October and November's muted growth, December's strong figures provide a "major boost" to hopes that GDP growth in the fourth quarter stayed up around the 0.8 per cent quarter-on-quarter rate that we saw in the second and third quarters of 2014.

Internet sales, which are seasonally adjusted, leapt 11.8 per cent in December compared to a year earlier. In November, they increased just 1.8 per cent. Several high street stores have reported very strong online growth. For Argos, internet business accounted for nearly half of its Christmas sales, with nearly 30 per cent of its sales made from tablets and phones.

It was a better Christmas for small stores too, with spend up 8.1 per cent, meaning they fared far better than larger counterparts, who saw sales increase only 2.6 per cent in over the month. Small store sales were mostly of household goods, said the ONS.

Since the beginning of the year, we've had a swathe of varying results from big Britain's retailers. While some prospered on strategies that successfully melded in store and online, others lost out, reporting grim sales figures and issuing profit warnings.

Argos, Primark, Waitrose, Sainsbury's, Co-op, Dixons, Halfords and Thorntons have all emerged as festive season winners.

Meanwhile M&S, Tesco, Morrisons saw sales slide in the run-up to Christmas, and Debenhams has issued a profit warning, expecting pre-tax sales to be down £30m in the six months to April.

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