Analysis: Why the figures don't add up

Official figures this morning showed an unexpected rise of 1.5 per cent in retail sales in the UK last month. British retail sales rose 0.3 per cent in November and are up 1.5 per cent on last year, according to the Office for National Statistics (ONS).

A 3.9 per cent rise in sales of household goods, the biggest monthly increase since July 2007, fuelled the growth. Food sales were up 0.2 per cent, but clothing and footwear sales dropped 0.5 per cent.

It is the second consecutive month that the ONS has produced better-than-expected figures. Last month, it reported a drop of 0.1 per cent in sales in October, far less than had been expected after a fall of 0.5 per cent in September.

This morning, the British Retail Consortium (BRC), said the ONS figures painted an "an overly rosy picture of the reality faced by customers and retailers".

Stephen Robertson, director general of the BRC, said: “Most retailers won’t recognise these surprisingly strong ONS retail figures. The idea that both total sales by value and volume went up significantly compared to a year ago is hard to explain."

The most recent assessment from the BRC showed a second consecutive monthly drop in the value of retail sales.

The reliability of the ONS figures has been called into question, given the prevailing atmosphere on the high street.

Leading retailers have been trying to lure Christmas shoppers with discount days and early sales. Marks & Spencer has held two one-day "Spectaculars", selling many items at a 20 per cent discount, since November.

Debenhams has held three-day sales and last week Tesco, Britain's biggest supermarket, held a one-day sale offering 50 per cent off Christmas goods.

A Populus poll conducted for The Times last week found that consumers expect to cut their spending on Christmas gifts sharply this year.

On average, adults expect to spend almost £359 on presents this year, nearly £35 less than a year ago — a decline of 8.8 per cent. This is only just over £3 higher than in December 2005.

The gloom for retailers was reinforced with an announcement earlier this week from Hennes & Mauritz, Europe's second-largest clothing retailer.

The Stockholm-based chain shocked the markets with results showing weaker-than-expected trading in November.

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