Retail sales rose at their fastest rate in nine years in December, the Office for National Statistics reported yesterday. However, some City analysts immediately cast doubt on the reliability of the figures.
According to the ONS, retail sales grew by 2.6 per cent month-on-month in December, well ahead of City expectations of 0.4 per cent. Department stores put on a record monthly sales increase of 8.7 per cent. Total sales were 5.3 per cent higher than in the Christmas period of 2012, representing the fastest annual rate of growth since 2004.
David Tinsley of BNP Paribas described the figures as "spectacular and surprising" and said that deep discounting by stores drove a huge increase in sales volumes. However, Andrew Goodwin of the Ernst & Young Item Club said he was "extremely sceptical" of the figures, pointing out that they did not tally with mixed reports from individual firms of their festive trade and last week's survey from the British Retail Consortium which pointed to annual sales growth of just 1.8 per cent last month. "If they [the ONS] figures are not revised, then the chances are there will be a large fall in January," said Mr Goodwin.
Another sceptical voice was Société Générale's Brian Hilliard, who pointed out that the strong month-on-month growth probably reflected the ONS's difficulties in seasonally adjusting its Christmas figures, which always show a sharp spike at the year's end. "The seasonal factor presents a misleading picture of sales," he said. "For the winter sales season as a whole, we do not expect that sales will have been exceptional."
None the less, the performance bolstered hopes that the overall economy continued to grow strongly in the final quarter of 2013.