Retail sales end year on strong note with solid year-on-year growth in December, according to MasterCard report
Retail sales end year on strong note with solid year-on-year growth in December, according to MasterCard report
MasterCard Advisors’ SpendingPulse, a macro-economic report tracking UK retail and service sales, today said that UK retail sales ended the year on a strong note in 2010, growing by a healthy 3.9% year?to?year in December 2010.
Based on aggregate sales activity in the MasterCard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and cheque, it found the pace of sales last month picked up a bit from the 3.4% year?to?year growth of November, and is the strongest showing for retail sales since April 2010.
Overall, it is claiming that retail sales were up by 3.6% from 2009, which it said points to a recovery of sorts, given the moderate 2.4% annual growth at the end of 2009; although this is at odds with the pessimistic outlook previously indicated by the industry.
Kamalesh Rao, director of economic research for SpendingPulse, said: “The latest figures are the strongest showing for retail sales since April, and a continuation of general pickup in spending we’ve seen over the past several months. The momentum of spending has persisted despite tougher year?to?year comparisons from late 2009.
The only way is up
“Weak sales from early 2009 helped boost year?to?year growth rates for most of this year, but even as those comparisons have gotten tougher, retail sales have managed to post healthy growth rates.”
Price growth may have been a factor in some of the gains at the end of the year, according to the report. Retail prices grew by 0.3% year?to-year in December. This is weak growth at best, but it is a reversal of the price declines seen in November and October, it added.
A key driver identified behind the recent strength in retail sales has been the pickup grocery store sales over the past several months. In December, grocery sales jumped to a 7.3% year?to?year growth rate on the back of a surge of Christmas related spending.
Meanwhile, the report said clothing sales continued to post strong growth with a 6.0% jump year-on-year increase in sales. Similarly, petrol did too with a 7.9% growth. But department stores, however, started to show some sluggishness, slipping to a 2.9% growth rate last month. And Furniture sales and travel spending posted the same level of growth at 4.9%.
SpendingPulse is published ahead of official UK government retail spending figures.
