Xmas > Christmas News

High street sales hit year high

Fri, 17 Nov 2006

This Christmas should be a happy one for retailers as sales rose by almost 4% in the three months leading to October compared to the same time in 2005, the latest official figures reveal.

The office for National Statistics said sales, on a seasonally adjusted basis, rose by 0.9% in October compared to September, above the 0.3% expected by economists. This represents the largest growth experienced since November 2005 and was largely fuelled by a sharp increase in textile and clothing sales .

All sectors benefited from the boost, especially internet and mail order sales which jumped by 2.5% while clothing sales had a strong month, up by nearly 2% the highest level since February.

Jonathan Said, senior economist at the Centre for Economics and Business Research, said, "The main factor driving the retail jump last month was the warm weather, which persisted into September pushing winter shopping into October.

"Today's news confirms that the UK consumer remains in a healthy position and willing to spend. Despite the climate of rising interest rates and squeezed household bills, the buoyant housing market, the fastest expansion of the labour market in 20 years and a robust finance and business sector are making retailers happy."

Paul Clarke head of retail at Barclays Bank agreed, "We reckon sales will be up 3% to 4% this Christmas against last year.

"Christmas Day falling on a Monday would be good for the shops, as it meant last-minute shoppers mostly men would have a whole weekend to get in the goodies."

However, he added, "It won't be the best Christmas ever. None of us have got buckets of money to spend this year."

Mr Said added, "The Bank will be looking at today's data and saying, 'fair enough, if consumers continue to spend so much through Christmas, and as a result ask for higher wages in the coming settlement round, then we have the ammunition to raise rates early in 2007."

Last year, the run-up to Christmas was very sluggish, leaving retailers wringing their hands hopefully this year will be better.