Retail Sales Data not "Turning the Corner"

This morning the CSO published the Retail Sales Index for December.  The release gives the final retail sales figures for November and preliminary estimates for Decemeber.  As with many other indicators the data show the rate of decline in the economy accelerating.  Here is a graph of the annual change in the value index excluding motor sales for the past two years.

The annual decline accelerated in December to -11.6% after being -11.0% in November.  See the downward trend in the actual index in this graph. No sign of any corner being turned here.

By volume the rate of decline accelerated from -5.9% to -6.7%.  Graph here. Volume is falling at a slower rate than value as retailers are reducing prices to try and increase the quantity of sales.  They are failing.

The best example of this can be seen if we compare the value and volume sales indices for Department Stores.

Department Stores make up about 5% of the Retail Sales Index and 70% of that is clothing. It is clear that there has been a huge divergence between the quantity of sales (volume) and the revenue earned (value). While both recovered somewhat in December, volume is still down 5% over the two years and value is down by over 20%. The larger drop in value is due to heavy price discounting. Tweet