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Dec. 20 (Bloomberg) -- An index of U.K. retail sales unexpectedly rose to a seven-month high in December, boosted by retailers offering pre-Christmas discounts.
The gauge of annual sales growth increased to 9 from minus 19 in November, the London-based business lobby said in a report today. Retailers had forecast a drop to minus 6 in December and a measure of expected demand for next month was at minus 18.
“Early discounting helped retailers add a little extra sparkle to their sales in December, although the reprieve appears to only be temporary as they don’t expect sales to continue to grow into January,” Judith McKenna, who heads the CBI’s distributive trades panel and is also chief financial officer of Wal-Mart Stores Inc.’s Asda unit, said in a statement.
Nationwide Building Society said today that consumer confidence rebounded last month from a record low, while noting that Britons remained cautious about the future. Unemployment rose to a 17-year high in the three months through October, and Bank of England officials have said Britain faces at least one quarter of contraction.
A measure of three-month sales volumes was at minus 7 in December, down from minus 15, the CBI said. An index of the volume of sales for the time of year rose to minus 16 from minus 39. A gauge of orders placed with suppliers increased to minus 4 from minus 25, while an index of stock volumes in relation to expected demand rose to 10 from 8.
Ocado Group Plc, the U.K.’s biggest online-only grocer, forecast yesterday that full-year profit will be below analysts’ estimates after sales growth slowed amid worsening delivery times and order accuracy.
Associated British Foods Plc, the owner of the Primark discount-clothing chain, reiterated on Dec. 9 its forecast that sales and profit will increase this fiscal year as commodity costs ease. Chairman Charles Sinclair said the growth outlook in developed economies is “subdued” and the company expects “pressure on consumer disposable incomes to be maintained.”
--With assistance from Mark Evans in London. Editors: Fergal O’Brien, Eddie Buckle
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