(Adds John Lewis figures, economist reaction)
By David Milliken
LONDON, Dec 20 (Reuters) - British retail sales grew at the fastest rate in more than a year in a crucial shopping period in late November and early December, but stores fear a slowdown early next year as higher prices start to bite, an industry survey showed on Tuesday.
The Confederation of British Industry said retailers reported the fastest sales growth since September 2015 in the three-week period including ‘Black Friday’ discounts at the end of November and the first two weeks of December.
The CBI distributive trades survey’s retail sales balance jumped to +35 for December from an already robust +26 for the first half of November, beating industry forecasts that growth would slow slightly.
“(This) points to consumers splashing out in the run-up to Christmas, thereby maintaining a strong fourth quarter performance and boosting hopes that GDP growth has held up well,” IHS Markit economist Howard Archer said.
The CBI’s December period runs from Nov. 24 to Dec. 13, so it includes the surge in sales reported following ‘Black Friday’ on Nov. 25, when many British retailers copy U.S. stores’ post-Thanksgiving discounts.
Clothing and food sales did particularly well, the CBI said.
However, retailers predict weaker sales growth in January and plan to cut back orders with suppliers. The CBI said it expected rising inflation following Britain’s June vote to leave the European Union to depress growth in spending.
“The pressures on retail activity are likely to increase during 2017,” CBI economist Ben Jones said. “With higher inflation beginning to weigh on households’ purchasing power, consumption patterns are likely to shift, creating winners and losers across the retail landscape.”
Separate figures on Thursday from upmarket department store chain John Lewis showed only lacklustre growth, with spending up just 0.4 percent on the year in the week to Dec. 17.
The store, the only major British retailer to publish weekly sales data, said the fact that Christmas fell on a Sunday this year meant some shoppers may be waiting until nearer the day before buying gifts.
Official retail data last week showed a slowdown in sales growth in November, though this mostly reflected a fall in fuel purchases which are not included in the CBI data. Electronics sales surged off the back of Black Friday discounts.