U.K. retail sales likely to have dropped sequentially in December

The U.K. retail sales for the month of December are expected to have disappointed. The reports on the Christmas sales season have indicated a strong sales performance that has confused market’s concerns of a set-back after solid Black Friday sales campaigns. According to the CBI survey, a there was a considerable rise in the balance of reported sales from 26 to 35. However, the BRC survey indicated a stable real sales growth.

However, these survey readings should not be misinterpreted. Both surveys take into account sales compared to a year earlier rather than to the previous month. This keeps a low bar because sales actually dropped 1.3 percent sequentially in December 2015. On this basis, it might be possible for sales to have improved that performance but still to have dropped sequentially and that is indeed what is anticipated, said Societe Generale in a research report.

“Sales are likely to have fallen by 0.4 percent mom but that will still have led to an increase in the yoy rate from 6.6 percent to 7.5 percent”, added Societe Generale.