Retail sales, Great Britain: December 2018

• In the three months to December 2018, estimates in the quantity bought decreased by 0.2% with declines across all main sectors except fuel.

• When compared with the previous month, the quantity bought in December 2018 decreased by 0.9%, as all sectors except food stores and fuel stores declined on the month.

• Looking at annual growth rates, the whole of 2018 increased by 2.7% in the quantity bought; an annual slowdown in comparison with the peak of 4.7% experienced in 2016.

• In December 2018, online retailing accounted for 20% of total retailing, with an overall growth of 13.9% when compared with the same month a year earlier.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the five-week period 25 November 2018 to 29 December 2018. The official Black Friday day of promotions was on 23 November 2018. Cyber Monday, however, is included in December data as it took place on 25 November 2018.

Unless otherwise stated, the estimates in this release are seasonally adjusted.

Retail sales collects turnover data from retailers, which is money through the till before any deductions, including refunded items. This provides us with the best indicator for consumer spending during the reference period. In non-seasonally adjusted terms, consumer behaviour for aspects of Christmas shopping has shifted in recent years from being mainly in December to more in November, as consumers seem to be starting their purchasing earlier in line with Black Friday promotions. This change in behaviour can be considered as part of our approach to seasonal adjustment.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of price changes).

The RSI is an important economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision- and policy-making.

Summary information can be found in the RSI Quality and Methodology Information report.

In December 2018, estimates for both the amount spent and quantity bought increased when compared with the same period a year earlier (Table 1). When compared with the same month a year earlier, the amount spent increased by 3.7% and the quantity bought increased by 3.0%.

Showing a different picture, December 2018 decreased by 0.9% for both the amount spent and the quantity bought when compared with the previous month. The three months to December 2018 also decreased by 0.1% in the amount spent and 0.2% in the quantity bought, when compared with the previous three months.

Looking at the longer-term trend helps to understand these contrasting pictures (Figure 1).

The general long-term trend is one of growth, which is seen in the year-on-year growth rate in Table 1. The three-month on three-month growth rate, in contrast, shows that in recent months sales have slowed for both measures and flattened from September 2018 to December 2018.

From January 2014, the trend in the amount spent remained relatively flat as the quantity bought increased at a faster rate up to January 2016. Sales began to increase at a stronger rate of growth from January 2016 for both the amount spent and quantity bought. From January 2017, the amount spent continued to increase at a steady rate, while the quantity of goods bought slowed to increase at a slower pace. The warm summer months from May 2018 to July 2018 saw increased retail sales as both the amount spent and quantity bought showed a sharper increase during this period. In later months, from September 2018, growths for both measures were flat to December 2018.

In 2018, the quantity bought in retail sales increased by 2.7% (Figure 2).

After experiencing declines of 0.8% and 0.1% in 2010 and 2011 respectively, the quantity bought began to increase for each year up to 2016 when the growth rate reached 4.7%. This growth slowed considerably in 2017 at 2.0% and increased in 2018 to 2.7% when compared with a year earlier.

Figure 3 displays the contribution to month-on-month growth, with both the quantity bought and amount spent at negative 0.9 percentage points.

Non-food stores was the largest contributor towards the decline seen in December 2018 for both the quantity bought and amount spent, at negative 1.1 percentage points. Non-store retailing also reported negative contributions in December 2018, with negative contributions of 0.2 percentage points for both the quantity bought and amount spent.

Both food stores and fuel stores reported positive contributions in December 2018, highlighting that the decline in December was driven by a fall in the purchase of non-essential items.

In December 2018, all four main sectors contributed positively to both the amount spent and the quantity bought, resulting in year-on-year growth of 3.7 and 3.0 percentage points respectively.

Non-store retailing provided the largest contribution to the growth reported in December 2018, with both the amount spent and quantity bought contributing 1.2 and 1.1 percentage points respectively.

All other sectors also reported positive contributions to growth for both the amount spent and quantity bought.

Figure 5 shows the non-seasonally adjusted growth rates for November and December for years 2014 to 2018.

In 2014, growths into December reached 13.6% in contrast with the slower growth of 11.0% in November. In 2015, 2016 and 2017, spending evened out over the months and we no longer see the increases to growth into the December months.

In 2018, as growths to December slowed to 9.8%, growths to November increased to 13.1%, showing a shift in spending to earlier in the year.

This change in behaviour is considered as part of our approach to seasonal adjustment.

In December 2018, online retailing accounted for 20.0% of total retailing on a non-seasonally adjusted basis (Table 2). Non-seasonally adjusted average weekly spending online was £1.9 billion in December 2018; an increase of 13.9% when compared with December 2017.

Month-on-month growth is seen across all sectors except household goods stores and other non-food. Household goods shows a strong decline of 17.9% following strong Black Friday promotions, which boosted sales in November 2018.

The most recent international estimate of retail sales available for November 2018 was published by the US Census Bureau on 14 December 2018. In its advanced monthly sales for retail and food services, November 2018 (PDF, 1.6MB) they include the amount spent in the US retail industry, including motor vehicles and parts and food services.

Eurostat also published their latest estimates of the Volume of retail trade (PDF, 505KB) across the European Union on 7 January 2019 for November 2018. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with July 2018.

Data for Northern Ireland are published by the Northern Ireland Statistics and Research Agency (NISRA).

It should be noted that accurate comparisons cannot be made against these or other international statistics due to a variety of reasons, including differences in methodology.

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

• response rates

• standard errors

• revision triangle

• distribution analysis

The Retail sales Quality and Methodology Information report contains important information on:

• the strengths and limitations of the data and how it compares with related data

• uses and users of the data

• how the output was created

• the quality of the output including the accuracy of the data