Retail sales, Great Britain: December 2016

• Estimates of the quantity bought in retail sales increased by 4.3% compared with December 2015 and fell by 1.9% compared with November 2016.
• The largest contribution to the month-on-month fall came from non-food stores.
• The underlying trend remains one of growth with the 3 month on 3 month movement in the quantity bought increasing by 1.2%.
• Average store prices increased by 0.9% on the year and for all retailing excluding fuel prices increased by 0.1%; the first increase since June 2014.
• Online sales (excluding automotive fuel) increased year-on-year by 21.3%, but fell on the month by 5.3%; accounting for approximately 15% of all retail spending.

Commenting on today’s official retail figures, Kate Davies, ONS Senior Statistician said:

"Retailers saw a strong end to 2016 with sales in the final quarter up 5.6% on the same period last year, although the amount bought fell between November and December once the effects of Christmas are removed. There were some notably strong figures from smaller retailers, in particular butchers, who reported a significant boost in sales in the run up to Christmas."

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 27 November 2016 to 31 December 2016. Unless otherwise stated, the estimates in this release are seasonally adjusted. Estimates for December 2016 did not include “Black Friday”, however, “Cyber Monday” is covered in this reporting period. These events occurred in the corresponding periods in 2015.

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 inflation). Unless otherwise stated all estimates included in this release are based on seasonally adjusted data.

The RSI is a key 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 Summary Quality and Methodology Information Paper.

Table 1 shows percentage changes for both the value and volume of sales.

While December 2016 has fallen on the month, the underlying pattern in retail sales as shown by the 3 month on 3 month growth rate is still one of growth.

Longer term, retail sales have continued to grow strongly since 2014, following a stagnant period during the economic downturn. Growth in sales coincides with a continued decline in store prices as prices began to fall in March 2014 (Figure 1).

Average store prices have risen in recent months for all retailing, primarily as a result of price rises at petrol stations. However, increased prices are now visible in other store types, which may have contributed to the monthly fall in the quantity bought in December 2016.

Table 2 shows that in December 2016, average store prices increased by 0.4% compared with November 2016, and 0.9% compared with December 2015; the largest year-on-year increase since December 2013. This is the fifth consecutive month that average store prices increased.

For all retailing excluding fuel, December 2016 is the first month since June 2014 to show a year-on-year increase in the average store price.

In 2015 for every pound spent in the retail industry:

• 40 pence was spent in food stores
• 43 pence in non-food stores
• 8 pence in non-store retailing
• 9 pence in petrol stations

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

In December 2016 compared with December 2015, all main retail sectors saw an increase in the quantity bought (volume) while all sectors, except petrol stations saw an increase in the amount spent (value). The largest contribution in both the quantity bought and amount spent came from non-food stores.

Small businesses show an estimated increase of 17.4% in comparison to December 2015, for non-seasonally adjusted comparisons. Feedback from businesses, such as butchers, suggested that meat purchases in preparation for Christmas have contributed to good sales, in addition to an extra trading day. Other small stores also benefited from Christmas sales.

In non-seasonally adjusted terms, retail sales have grown, however, this increase is not as strong as seen in previous years, hence, when seasonally adjusted, the month-on-month shows a fall.

The monthly picture, as shown in Figure 3, shows that all main retail sectors saw a decrease in the quantity bought (volume), with the largest downwards contribution coming from non-food stores. Looking at the amount spent (value), 2 of the 4 main sectors showed decreases, once again, the largest downwards contribution from non-food stores.

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain.

Table 4 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

In December 2016:

• average weekly spending online was £1.0 billion; an increase of 21.3% compared with December 2015

• the amount spent online accounted for 15.1% of all retail spending, excluding automotive fuel, compared with 13.1% in December 2015

The only international estimate of retail sales available for December 2016 was published by the US Census Bureau on 13 January 2017. In its advanced retail trade estimates for December 2016, 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 across the European Union on 6 January 2017 for November 2016. This shows the seasonally adjusted volume of retail trade in both the euro area (EA19) and EU28 when compared with October 2016.

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.

This is the first Retail Sales bulletin released using the new streamlined format. Some tables including distribution analysis, response rates, revisions triangles and standard errors previously found in the bulletin, can now be found in the main datasets.

Please provide us with your feedback on our new style statistical bulletin by e-mailing retail.sales.enquiries@ons.gov.uk.

Economic commentary will be published alongside the short-term indicators theme day on 10 February 2017.

From late January onwards, all Retail Sales data will be collected online, this means that all data published for the January 2017 release on 17 February 2017 will be fully collected online through our online surveys portal. For the December release, 65% of the sample was collected via an electronic questionnaire, of those asked to return data via this method 75.5% completed online. This is known as digital take-up and is the highest we have achieved to date.

Our Monthly Business Survey (MBS) for retail sales survey 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 or paper questionnaire every month.

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

• response rates
• standard errors
• revision triangle
• distribution analysis

The Retail Quality and Methodology Information document 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