Retail sales on a growth path, says ONS

Retail sales on a growth path, says ONS

	Published : Fri, 16 Dec 2005 08:05 By : Amy Watts Print this Story

LONDON: There is ample sign that retail sector is picking up, albeit slowly. Sales rose 0.7 per cent in November, according to the Office for National Statistics, after there was an upward revision of 0.4 per cent in October. This is the sharpest rise in five months and it has taken the annual rate of growth to 2.1 per cent.

Analysts are happy that the trend augurs well for the Christmas shopping season.

Though some companies like clothier French Connection, electricals major Dixons and home improvements store B&Q had complained about tough conditions on the high streets, there were others who reported encouraging response from the shoppers.

Swedish clothing retailer H&M said its sales had grown by 11 percent on the year in November. Its new designs by Stella McCartney had a very encouraging response -- to such an extent some of the retail stores were sold out on the items on the intro day itself.

ONS reported the sharpest rise in clothing and footwear stores, with sales 3.6 per cent higher on the month. This nearly accounted for three-quarters of the 0.7 per cent monthly gain.

Some analysts fear that this better-than-expected figures could hamper a possible cut in the cost of borrowing. The Bank of England had last week decided to retain the interest rates at 4.5 per cent, in spite of growth having averaged below-trend. The bank's Monetary Policy Committee is apprehensive that higher energy costs may cause an inflationary spiral with wages and prices rising.

The ONS said the November figures showed a continuation of the pick-up seen in recent months. Over September-November, sales went up 1 per cent on the previous three months, again the highest rise since August last year.

Compared with the same period a year ago, sales were up 1.3 per cent with trading volumes 2.4 per cent higher at food stores, 1 per cent higher at non-food stores, and 3.1 per cent higher at clothing stores, ONS said.

However, sales were down 1.3 per cent for household goods stores and 2.9 per cent for non-store retailing where lower sales by catalogue companies outweighed increases online.