Instant View - Retail sales in November weaker than expected

LONDON (Reuters) - LONDON, Dec 20 (Reuters) - British retail sales unexpectedly failed to grow last month, despite a boost from the sale of consumer electricals like tablet computers, raising doubts about the economy's health towards the end of 2012.

KEY POINTS

- Biggest monthly fall in non-specialised store volumes since February 2011

- Biggest monthly rise in household goods sales volumes since February 2010

- Biggest annual rise in household goods sales volumes since January 2011

- Biggest annual fall in automotive fuel sales since October 2010

ECONOMISTS' VIEWS

CHRIS WILLIAMSON, MARKIT

"The underlying trend in retail sales has deteriorated to the worst since September 2011, and sales could even fall over the fourth quarter as a whole according to the indications available so far.

"With production and trade data also turning down towards the end of the year, its looking very unlikely that the consumer is going to save the economy from sliding back into another contraction."

HOWARD ARCHER, IHS

"Retail sales volumes disappointingly were only flat in November after October's marked drop, indicating that consumers were cautious going into the Christmas shopping period.

"Furthermore, the CBI distributive trades for December indicates that consumer caution continued during the first half of this month.

"Consequently, retailers will be fervently hoping that many people are leaving their shopping late. Flat retail sales in November is also a significant blow to hopes that the economy can avoid a renewed dip in the fourth quarter."

RICHARD LOWE, BARCLAYS

"November proved to be an uninspiring month, however, the final festive push is underway, with many retailers extending opening hours to ensure they get every last penny through the door."

GEORGE BUCKLEY, DEUTSCHE BANK

"We did not see a bounce from the October decline - which fortunately was not that bad after today's revisions.

"The CBI distributive trades survey told us that retail sales are expanding but the expectations balance has worsened.

"This suggests that maybe consumers are having a difficult Christmas. But there are better signs going forward.

"Things like the fact that inflation is substantially lower, employment at a record high and the fact that people are saving is encouraging.

"These factors show that consumers will do a little better 2013. I don't expect anything dramatic but we have growth improving next year."

JAMES KNIGHTLEY, ING

"The headline growth figure is a disappointing outcome following a decent bounce in consumer confidence in November.

"Taken together with other activity numbers it looks as though we should be pencilling a GDP growth figure for the fourth quarter of 2012 of around zero."

ROB WOOD, BERENBERG BANK

"Retail sales don't bring much Christmas cheer today. They show consumer spending power remains under pressure from a depressing pincer movement of above-target inflation and weak wage growth.

"Inflation is well down from its peak in 2011, so things aren't as bad as they were, but real incomes remain under heavy pressure as inflation runs ahead of wage growth, and consumption won't be driving growth forward anytime soon."

BRIAN HILLIARD, SOCIETE GENERALE

"Pretty much as expected, we had a slightly higher number but given the volatility in the data, I think this is pretty close to expectations.

"The short term outlook is poor, three month growth is flat and we will probably see a fall for the quarter as a whole.

"But I think this is a reaction to the distortions earlier in the year and I still expect some retail sales growth next year, especially once we get the energy price blip out the way."

PETER DIXON, COMMERZBANK

"It wasn't a million miles away from what the survey suggested, which pointed to fairly lacklustre sales in November.

"It basically tells us that consumers are still keeping their powder dry. It's in line with an economy in which consumers are remaining cautious.

"Things are not looking strong so far in the fourth quarter in general. The likelihood is that the (GDP) figure is going be modestly negative on the retail side. If the non-retail side manages to give it an extra lift, then there might be a small lift.

"This confirms the view that fourth quarter activity as a whole is going to be fairly weak. As the Bank of England said yesterday, a negative figure can't be ruled out as we get rid of the Olympic distortions."

PHILIP SHAW, INVESTEC

"Household good sales were very robust over the month but the bigger picture is that the release is disappointing, and coupled with a weak October implies a loss in momentum in high street sales ending a year that's been better than expected.

"It's important to distinguish between individual retailers and the bigger picture. It's clear some retailers are struggling.

"Retail sales excluding petrol is 2 percent higher than a year ago and that's much better than 2011.

"Much depends on whether you're looking from a company perspective or the economy as a whole. 2013 depends on whether the labour market trends remain as robust as this year."

(Reporting by Dasha Afanasieva, Natalie Huet, Peter Griffiths, Charlie Pollard and Peter Schwartzstein)

Source: http://news.yahoo.com/instant-view-retail-sales-november-weaker-expected-094410958--business.html

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