UK Bank Holidays and Retail Sales

Unofficial estimates of retail sales for August 2015 from the British Retail Consortium are mentioned in this article: from 8th September 2015.

This time period included particular issues which are relevant to seasonal adjustment, such as the treatment of the bank holiday which fell on 31st August. The article notes that:

“The bank holiday was on 31 August, but both the BRC and the Office for National Statistics judge that the month officially ended on 29 August. It means September’s figures will be boosted by back-to-school purchases. The bank holiday applied in England, Wales and Northern Ireland. Retailers report their sales on a weekly basis from Sunday to Saturday, which means that monthly figures do not necessarily cover the whole of a calendar month. Instead, a quarter will be made up of two four-week periods and a five week period. This is only particularly important when key shopping days such as bank holidays officially fall in different months from year to year, which makes comparisons difficult.”

The article doesn’t mention that if the seasonally adjusted estimates are used, then this problem is not relevant. Any comparison of the collected data which is not seasonally adjusted will be distorted by these type of events, but the use of seasonal adjustment approaches can estimate and remove the impacts of holidays, including those holidays that move over time. So only use the seasonally adjusted estimates to get the real underlying picture of what is happening. Even better is to use trend estimates that can be derived by smoothing the volatility from the seasonally adjusted estimates. So it is best to wait for the official seasonally adjusted estimates to see the real picture.