British retail sales stagnated in November

UK retail sales unexpectedly stagnated in November as

spending at department stores slumped the most in almost two years.

The Confederation of British Industry (CBI) said Thursday that its measure indicator of annual sales growth fell to 19 in December from 33 in November and that, consequently, retailers’ expectations for sales growth in January fell to 10, reported Bloomberg. Anna Leach, head of economic analysis at the CBI, said that “weak spending power and uncertainty over the economic outlook are likely to remain key risks to the retail sector in 2013.”

Sales of clothes and shoes dropped by 0.1 percent and added concerns over a new dip in consumer confidence. “The economic outlook has got worse and consumers are probably still really uncertain,” said Rob Wood, an economist at Berenberg Bank in London and a former Bank of England official. “There’s no good news ahead for them in the near term,” he added.

However, good news for e-tailers, as data also showed that online shopping continues to increase and now accounts for 10.8 percent of all retail sales. British consumers spent an average of 711 million pounds a week online in November, an 8 percent increase from a year earlier. As a good sample of the sweet moment that the online retailers are experiencing, London´s beloved Asos Plc (ASC), the UK’s largest online-only fashion retailer, saw earlier this month its first-quarter sales rose 30 percent in the three months ended Nov. 30 as it lowered prices of its own-brand label.

“The data suggest that the trend in retail sales has deteriorated markedly in the fourth quarter after a solid third quarter,” said Chris Williamson, chief economist at Markit, published ‘MarketWatch’. “December is so far not looking likely to bring any Christmas cheer. A disappointing survey found retailers reporting a deterioration in sales growth in December and a gloomier assessment of demand for the start of the new year,” he added.

Shares of fashion retailer Next PLC (UK:NXT) lost 1.1 percent, while Marks & Spencer Group PLC (UK:MKS) fell 0.6 percent.

In contrast, another report yet published by the US Commerce Department, may show consumer spending rose in November as Americans shopped for the holidays. Household purchases increased 0.4 percent after falling 0.2 percent in October, according to the median estimate of 66 economists in a Bloomberg News survey.