Retail sales, Great Britain: December 2019

• In the three months to December 2019, the quantity bought in retail sales decreased by 1.0% when compared with the previous three months.

• All sectors except household goods stores and fuel saw a decline in the quantity bought for the three-month on three-month movement; driven mainly by non-food stores at negative 1.0%.

• The quantity bought in December 2019 fell by 0.6% when compared with the previous month; the fifth consecutive month of no growth.

• The quantity bought in food stores fell by 1.3% for the monthly growth rate, which was the largest fall since December 2016, also at 1.3%.

• Comparing the three months to December 2019 against the same three months a year ago, growth in the quantity bought increased by 1.6% in December 2019, despite a strong decline of 2.2% for department stores.

• Online sales as a proportion of all retailing was 19.0% in December 2019, compared with the 18.6% reported in November 2019.

In the three months to December 2019, both the amount spent, and the quantity bought in the retail industry, fell by 0.9% and 1.0% respectively when compared with the previous three months (Table 1).

The monthly picture was also one of declines, at 0.3% and 0.6% for the amount spent and the quantity bought respectively. In contrast, when compared with a year earlier, both measures reported growth at 1.5% for the amount spent and 0.9% for the quantity bought.

Looking at the three-month on three-month growth rate, the quantity bought in retail sales has not experienced growth for three consecutive months. The three months to October 2019 remained flat, while the three months to November and December fell by 0.5% and 1.0% respectively. The last time we saw three months of no growth in the three-month on three-month movement was from February to April 2018. During this period, March and April 2018 fell to negative 0.4% and 0.2% respectively from a flat February 2018.

The summer months from June to September 2018 saw strong growths, attributed to warmer than usual weather and the football World Cup, increasing to 2.5% in July 2018 before reducing to 0.4% in October 2018. After a brief period of recovery from January to May 2019, a general downward trend followed from June 2019.

The decline of 1.0% for the quantity bought in retail sales in the three months to December 2019 was the largest decline since March 2017, also at negative 1.0%. This is the largest decline since March 2010 at negative 2.1%.

Declines were seen across most sectors except for household goods stores and fuel. The strong decline of 3.2% in non-store retailing was largely because of a fallback from very strong growth in the previous three months for September at 4.0%, this included large monthly growth in July of 7.3%, which was attributed to large promotions in the sector. The quantity of goods bought in non-store retailing increased on the latest month by 1.0%.

Food stores quantity bought fell by 0.6% in the three-month on three-month measure, with a strong monthly decline of 1.3% in December. This was the joint largest decline seen in food stores since December 2016 and the largest monthly decline since October 2015 of negative 1.8%. Anecdotal evidence from a number of stores stated that goods did not sell as well as expected in December 2019.

Clothing experienced strong declines both on the month at negative 2.0% and in the three months to December at negative 2.3%. This is the sixth consecutive month of no growth for clothing stores for the three-month on three-month movement.

The quantity bought within department stores continued the downward trend, with a monthly decline of 1.8% and a three-month on three-month decline of 0.3%.

Fuel and non-store retailing were positive contributors to the respective 1.5% and 0.9% overall growth for the amount spent and quantity bought in December 2019 compared with a year earlier, while non-food stores were negative for both measures.

The amount spent in food stores contributed positively by 0.2 percentage points, while the quantity bought provided a negative contribution at 0.3 percentage points.

The overall growth of negative 0.3% for the amount spent and negative 0.6% for the quantity bought in December 2019 compared with the previous month was because of negative contributions in both food and non-food stores. This was despite positive contributions in fuel at 0.4 (amount spent) and 0.2 (quantity bought) percentage points and in non-store retailing at 0.2 (amount spent) and 0.1 (quantity bought) percentage points.

We regularly look closely at our seasonal adjustment approach to ensure we capture any changes in spending caused by seasonal activity. We want to estimate and remove seasonal spending so we can show the underlying changes in the economy (we explained this further in November's release and our recent blog on the treatment of Black Friday).

This year our November reporting period ended six days before the official Black Friday on 29 November meaning that there was a shift in seasonal spending associated with Black Friday from the November to this December’s release. As a result, we carried out a dynamic seasonal adjustment to assess whether our usual approach accurately captured this change in activity. For example, stores that typically encourage more spending with Black Friday promotions were more affected by the loss of spending in the six-day run up to 29 November than stores that do not tend to carry out promotions.

The retail sector is diverse, and not all sectors within retail were affected by promotional sales in the same way. Essential items bought within supermarkets and petrol stations are less likely to have a “Black Friday effect”.

Store sectors where the timing of Black Friday was found to be statistically significant in November 2019, caused by the shift in timing related to Black Friday, were adjusted for accordingly to provide the best results.

Using the latest data available for December, we have reassessed our approach to ensure we have the most up-to-date estimates. We found that the same approach as described in our November bulletin remains appropriate.

Table 3 shows the month-on-month and year-on-year growth rates for the amount spent online, in addition to the proportion of online sales. The percentage weights indicate where money is spent online.

Online spending increased in December 2019 at 1.6% when compared with November 2019, with strong growth in department stores at 15.5% and household goods stores at 13.7%.

Internet sales increased by 5.6% in December 2019, when compared with December 2018. Household goods stores reported strong growth at 23.2%, while food stores reported the largest fall on record of negative 6.6%. This followed a period of relative strength in the sector after recovering from consecutive falls of negative 4.9% and 6.1% in May and June of 2019.

Online sales as a proportion of all retailing was 19.0% in December 2019, compared with the 18.6% reported in November 2019.

Value (amount spent)

The value estimates reflect the total turnover that businesses have collected over a standard period.

Volume (quantity bought)

The volume estimates are calculated by taking the value estimates and adjusting to remove the impact of price changes.

Seasonally adjusted

Seasonally adjusted estimates are derived by estimating and removing calendar effects (for example Easter moving between March and April) and seasonal effects (for example, increased spending in December as a result of Christmas) from the non-seasonally adjusted (NSA) estimates.

Non-seasonally adjusted

Non-seasonally adjusted estimates refer to raw data where the effects of regular or seasonal patterns have not been removed.

Non-store retailing

Non-store retailing refers to retailers that do not have a store presence. While the majority is made up of online retailers, it also includes other retailers such as stalls and markets.

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the five-week period 24 November 2019 to 28 December 2019.

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.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from 5,000 businesses in the retail industry, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month. 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).

Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Retail Sales QMI.

In the new year, with another full year’s data, we will be undertaking our annual update of our commodity deflators to improve our estimates of volumes sold.

Uses and users

The Retail Sales Index (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 HM Treasury to assist in informed decision- and policy-making.

Comparability to international data

The most recent international estimate of retail sales available for November 2019 was published by the US Census Bureau on 13 December 2019. In its advanced monthly sales for retail and food services, November 2019 (PDF, 1.25MB) 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, 502KB) across the European Union on 7 January 2020 for November 2019. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with September 2019.

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 for a variety of reasons, including differences in methodology.