Retail sales volumes were up by 0.6 per cent in December from November as UK consumers spent healthily in the run up to Christmas helped by fierce discountimg and competition amomgst retailers.
The value of sales was up by 6.2 per cent compared with December 2010 and the volume of sales increased by 2.6 per cent year-on-year.
The sales data gave some welcome news to the UK economy ahead of the first estimate of GDP for the fourth quarter of 2011, out next week.
James McGregor, director of the retail consultancy Retail Remedy said: "Any sighs of relief at these figures will come with big caveats attached.
"The year-on-year increase looks less impressive when you remember that Christmas 2010 sales were badly hampered by snow. And this modest spike in sales came at considerable cost to retailers, many of whom started aggressive price promotions as early as November."
The biggest drivers in increasing sales were the automotive fuel and textile sectors, up by 11.2 per cent and the footwear and clothes sector which saw a rise of 6.2 per cent compared to December 2010, a month that was adversely affected by winter weather.
Household goods stores saw a decline in sales of 3.6 per cent. online sales increased by 10.1 per cent compared to December 2010.
The Office for National Statistics (ONS) reported a increase which helped to wipe out the 0.4 per cent drop in November and means retail sales have grown by year-on-year.
The strong retail sales could have helped the economy avoid shrinking in the final quarter of 2011.
Howard Archer from IHS Global said: "The 0.6% increase in retail sales volumes in December boosts hopes that the economy avoided contraction in the fourth quarter of 2011. Indeed, retail sales were up 1.1% in the fourth quarter meaning that it would take sharply reduced spending on services to prevent an increase in overall consumer spending."
December’s sales figures were boosted by some of the fiercest competition ever seen on the high street and it is likely that profit margins for many companies took a battering.
The year-on-year comparison figures were also helped by the fact that December 2010 saw heavy snow that inevitably affected sales over Christmas 2010.
There were excellent bargains to be had as stores discounted deeper and earlier than normal in a bid to entice consumers, many of whom were reining in the purse strings.
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