UK retail sales flat in November

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Media captionBRC's Helen Dickinson: "We will see a flurry of activity as Christmas approaches"

UK retail sales failed to grow in November, adding to fears that consumers are reining in spending ahead of Christmas.

Sales volumes were flat in November compared with October, the Office for National Statistics (ONS) said.

They had been expected to bounce back after October's shock 0.8% fall.

The one bright spot was in household goods stores, where sales rose by 3.8% on the month, including consumer electrical items.

The pick-up in electrical sales may in part reflect a rush to buy discounted stock at the failed Comet chain, which closed its doors for the final time earlier this week.

In contrast, sales of both food and clothing (including shoes) registered a 0.1% drop from the month before.

Visa added to the bleak picture, announcing that the total value of sales using its payment system in the week to Sunday, 16 December - the penultimate week before Christmas - was down by 2.9% from a year ago.

'Last-minute rush'

The picture over the course of the last 12 months remains one of painfully slow growth, with the ONS reporting that the volume of sales in November up 0.9% from a year ago.

By value, sales in November fell 0.1% from the month before - reflecting price cutting by retailers - but increased 1.5% on the year.

The volume of retail sales has more or less stagnated since 2008. Prior to that, sales had grown at an average rate of about 3.7% each year since the ONS first began keeping records in 2000.

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Media captionWaitrose's Mark Price: Relaxing rules would be helpful

While sales by volume measures solely the quantity of goods sold, sales by value also takes into account the effect of inflation on prices. The ONS said the estimated prices of goods sold increased by 0.5% compared with November 2011.

Consumer spending accounts for about two-thirds of gross domestic product (GDP) in the UK.

The ONS figures provide more evidence that the UK economy may contract in the last three months of 2012, something the Bank of England has already said is likely.

This year has seen a number of casualties on the High Street, the latest being Comet.

British Retail Consortium director-general Helen Dickinson, said that the coming weekend would be crucial for retailers.

"With Christmas falling on a Tuesday this year, this weekend will be the critical one - I'm expecting a last-minute rush, but overall in sales terms it will be neither a bumper Christmas nor a disaster."

'Chaotic' Sunday

Meanwhile, there are growing calls for the government to extend opening hours on Sunday, 23 December, the last trading day before Christmas.

Supermarket chain Morrisons warned in a letter to Business Minister Michael Fallon last month of "chaotic scenes" as shoppers seek to cram their Christmas food shopping into the reduced hours available.

Sainsbury's, Asda and Waitrose have also lent their support.

"I think that Sunday is going to be a real challenge for our customers and for our partners," Mark Price, managing director of Waitrose, told BBC Radio 4's Today programme, calling for an extra two to three hours to be made available.

"The 23rd is always the busiest shopping day for food. Last year we had 14 hours to serve our customers on that day, this year we've got six hours. Clearly that's going to be difficult."

He also played down concerns over weakening consumer spending, saying that while it was true that in-store shopping was declining, in large part this was due to the shift to internet shopping.

"There has been a huge switch online this year," he said, noting a sharp rise in take-up of the firm's click-and-collect service and of its online store, which provides home delivery.

The Waitrose boss's experience was also reflected in the official ONS data, which showed that the proportion of sales made online in November had increased to 10.8%, from 9.4% a year ago.

"Feedback from retailers suggests that this increase is a result of their investment into their internet sites, as well as promotions held online only and not in store," said the ONS.

With overall sales growth almost stagnant, it meant that consumers had actually reduced the volume of goods they purchased in shops.

Visa likewise reported that the value of online sales that it recorded in the week to Sunday, 16 December had risen 2.3% from a year ago, even though overall spending was down.

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