UK retail sales rise in December, outlook for January weak

British retail sales grew slightly less than expected in the run-up to Christmas and the outlook for January was weak, a survey by the Confederation of British Industry showed on Monday.

The retail sales balance in the CBI survey rose to +19 in December from a nine-month low of +7 in November. But it was below a median forecast of +21 in a Reuters poll of economists.

Furthermore, a measure of sales expected for next month was the lowest since May 2012.

"It’s no surprise sales have recovered as we head into the final shopping days of the Christmas season," Barry Williams, the CBI's distributive trades chairman and chief customer officer at supermarket chain Asda, said.

"It would be ideal if the industry could keep that momentum into the New Year but retailers know 2015 was tough, and they’re expecting 2016 to start in much the same vein," he said.

British consumers have driven the country's economic recovery over the past two years, helped by a plunge in inflation to around zero. But wage growth remains weak and has not recovered its levels of before the financial crisis.

The survey showed food sales were solid as they rebounded from November’s lowest survey balance since May 2012. Clothing sales were also strong but footwear and leather sales growth fell.

The survey was conducted between Nov. 26 and Dec. 14 and was based on responses from retailers, wholesalers and motor traders, the CBI said.