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Black Friday sparks biggest retail sales boost in a decade Black Friday sparks biggest retail sales boost in a decade
(about 2 hours later)
Black Friday spurred retail sales to the strongest year-on-year rise in 10 years, according to official figures that show a 6.4% jump last month on the previous November.Black Friday spurred retail sales to the strongest year-on-year rise in 10 years, according to official figures that show a 6.4% jump last month on the previous November.
The spending splurge on 28 November was hailed as a huge success by retailers that discounted TVs, furniture and homewares to encourage a pre-Christmas buying rush.The spending splurge on 28 November was hailed as a huge success by retailers that discounted TVs, furniture and homewares to encourage a pre-Christmas buying rush.
Sales increased 1.6% from October, higher than analysts expected and adding to expectations that households are relaxing their budgets as wages rise more than inflation and the threat of an interest rate rise recedes.Sales increased 1.6% from October, higher than analysts expected and adding to expectations that households are relaxing their budgets as wages rise more than inflation and the threat of an interest rate rise recedes.
But there was a warning that the figures could overstate the strength of consumer demand as Black Friday fell in December last year, and though it had less impact in 2013, the spending may have merely brought forward sales due in November.But there was a warning that the figures could overstate the strength of consumer demand as Black Friday fell in December last year, and though it had less impact in 2013, the spending may have merely brought forward sales due in November.
Ian Geddes, UK head of retail at accountants Deloitte, said the numbers were “very strong”.Ian Geddes, UK head of retail at accountants Deloitte, said the numbers were “very strong”.
“However,” he added, “this year most of the boost provided by the biggest ever Black Friday has been felt in November, and this is reflected in month-on-month volume growth and strong year-on-year increase online. The extent to which sales have been promotionally driven is highlighted by the steepest decline in store prices for 12 years.” “However, this year most of the boost provided by the biggest ever Black Friday has been felt in November, and this is reflected in month-on-month volume growth and strong year-on-year increase online. The extent to which sales have been promotionally driven is highlighted by the steepest decline in store prices for 12 years.”
Intense competition both on the high street and online has pushed down prices alongside a near 50% fall in the oil price, which has cut the cost of petrol on the UK’s garage forecourts.Intense competition both on the high street and online has pushed down prices alongside a near 50% fall in the oil price, which has cut the cost of petrol on the UK’s garage forecourts.
Rob Wood, chief UK economist at Berenberg bank, said the falling oil price was “like a big tax cut for consumers”, and UK consumers tend to spend extra income.Rob Wood, chief UK economist at Berenberg bank, said the falling oil price was “like a big tax cut for consumers”, and UK consumers tend to spend extra income.
“They also evidently like price deals in the shops. It is unlikely that falling oil prices will induce a deflationary mindset among consumers, meaning they decide to delay buying a television because filling up the car got cheaper. Those downside risks from falling oil prices are overplayed, especially in the UK.“They also evidently like price deals in the shops. It is unlikely that falling oil prices will induce a deflationary mindset among consumers, meaning they decide to delay buying a television because filling up the car got cheaper. Those downside risks from falling oil prices are overplayed, especially in the UK.
“In our view, now is the time to be optimistic about the UK. A tax cut funded by Russia and Middle East and falling mortgage rates should combine in a powerful cocktail that boosts UK growth next year.“In our view, now is the time to be optimistic about the UK. A tax cut funded by Russia and Middle East and falling mortgage rates should combine in a powerful cocktail that boosts UK growth next year.
Maeve Johnston, UK economist at Capital Economics, was equally optimistic. “The underlying picture remains very strong,” she said. “Even if retail sales volumes shrink by 1% in December to offset spending brought forward into November, they would be still 1.6% higher in the fourth quarter than in Q3.Maeve Johnston, UK economist at Capital Economics, was equally optimistic. “The underlying picture remains very strong,” she said. “Even if retail sales volumes shrink by 1% in December to offset spending brought forward into November, they would be still 1.6% higher in the fourth quarter than in Q3.
“This could boost quarterly GDP growth by 0.3 percentage points in Q4, although some of this boost may be offset by higher imports.”“This could boost quarterly GDP growth by 0.3 percentage points in Q4, although some of this boost may be offset by higher imports.”