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Economy

Retail spending bounces back in December despite ‘tough’ festive period

Retail spending bounced back in the UK in December 2018 after a tough November as GlobalData’s total retail index rose by 11.5 points versus the previous month.

The company’s latest report ‘UK Monthly Spend Tracker – December’ revealed that despite improved spending in the month, many retailers started their sales before Christmas to drive revenue and clear through stock. Signifying the wider trend in retail, Next experienced a rise in full price sales from mid-December as financial uncertainty led consumers to wait until December payday to complete their Christmas shopping.

The electricals sector experienced the biggest increase in total spend index as many items were discounted and products bought as gifts after a “disappointing” November for the sector. The in-store spend index rose more steeply than online, in spite of the deals and products offered by retailers online, especially Amazon. Food and grocery experienced the smallest increase in total spend index as consumers opted for more value-led products instead of premium ranges.

Emily Salter, retail analyst for GlobalData said: “December saw uplift in instore spending in particular as the instore retail spend index increased by 12.1 points versus November. Consumers’ worries around online orders being delivered in time for Christmas lured last-minute shoppers to physical offline locations.

“Looking ahead, although the festive spirit improved consumer sentiment surrounding the economy and personal finances in December compared to November, this slightly increased optimism is unlikely to continue into January, particularly due to the persistent uncertainty of Brexit.”

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