Surprise rise in retail sales figures

Retail sales defied expectations again last month with a surprise 1.6 per cent rise for the Christmas period, official figures revealed.

But the Office for National Statistics (ONS) said the value of sales fell 0.8 per cent compared to last year, the worst performance since records began in 1986.

The slump was driven by predominantly non-food stores as high street retailers slashed prices. Volumes were up between November and December, driven by higher sales of household goods.

Analysts had expected a seasonally-adjusted fall of between 0.5 per cent and 0.8 per cent from retailers after survey data over the Christmas period suggested the high street had suffered a severe slump.

This is the second consecutive month that ONS figures have shrugged off gloomy expectations. The Government's cut in VAT, from 17.5 per cent to 15 per cent, and the earlier start of sales created uncertainty in the figures, the statistics authority warned.

Non-seasonally adjusted sales volumes - which the ONS said could be more representative - rose by 1.8 per cent between November and December, the lowest growth since March 2006.

Sales volume for mainly food stores was 2.1% lower than a year ago on a non-seasonally adjusted basis, the lowest growth since April 1999. The strongest growth in the non-food sector was in household goods, which saw a rise of 3%.

In a sign that consumers were migrating away from the high street, internet sales represented 3.5 per cent of total retail sales - an increase of 19.6 per cent from December 2007.

The total value of sales for the December trading period was estimated at £33.6 billion, with non-food stores 3.6 per cent than a year ago, the lowest growth since March 1992 when it fell by 4.3 per cent.

Food stores saw the value of their sales rise 2.1 per cent, while the non-store retailing and repair sector was 8.7 per cent higher