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Statistical bulletin: Retail Sales, August 2012 This product is designated as National Statistics

Released: 20 September 2012 Download PDF

Key points

  • In August 2012 retail sales were estimated to have increased compared with August last year, continuing the underlying year-on-year upwards movements we have seen in the retail sector since August 2011. However, this is not a long term pattern for the volume of sales which overall, between 2007 and 2012 have been relatively flat.
  • Compared with August 2011, in August 2012 the amount of goods bought in the retail sector (all retailing seasonally adjusted sales volumes) was estimated to have increased by 2.7 per cent. Over the same period, the amount spent in the retail sector (all retail seasonally adjusted sales values) was estimated to have increased by 3.0 per cent.
  • Looking at the monthly picture, it is estimated that the amount of goods bought in retail stores (August 2012 compared with July 2012) fell by 0.2 per cent following a 0.3 per cent rise in July 2012. Over the same period, the amount spent was estimated to have increased by 0.2 per cent following a 0.7 per cent increase in July 2012.
  • Annual estimated store price inflation remained at 0.2 per cent. As included in the Consumer Prices Index the main source of downward pressure came from a fall in prices at stores selling household goods and clothing.
  • The average weekly spend for all retailing in August 2012 was £6.5 billion; compared with £6.6 billion in July 2012 and £6.3 billion in August 2011.
  • The proportion of Internet sales decreased by 0.9 per cent between July and August 2012. Compared with a year ago, the proportion of Internet sales in August 2012 increased by 0.3 per cent. In August 2012 the estimated average weekly spend online was £466.1 million.

Key figures

Table 1: All Retailers, August 2012 (seasonally adjusted percentage change).

      Most recent month on a year earlier Most recent 3 months on a year earlier Most recent month on previous month Most recent 3 months on previous 3 months
Value      3.0 2.7 0.2 -0.1
Volume     2.7 2.4 -0.2 0.6
Value excluding automotive fuel 3.4 3.5 -0.1 0.6
Volume excluding automotive fuel   3.1 3.0 -0.3 1.0

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The ONS Retail Sales Index (RSI) is calculated from a sample of 5,000 retailers representing approximately 90 per cent of all known retail activity within Great Britain. The sample contains 900 large retailers, i.e. businesses employing more than 100 employees or with annual turnover greater than £60 million, and a random sample of smaller retailers.

Retailers in the sample are asked to provide their total retail sales turnover and total turnover for sales made via the Internet for the specified period. The RSI is used to inform decisions on the current economic performance of the retail sector and is a data source for Gross Domestic Product. The August 2012 period covers the dates 29 July 2012 to 25 August 2012.

At a glance

All retailing

In August 2012 the amount of goods bought (volume) in the retail sector was estimated to have increased by 2.7 per cent compared with August 2011. The non-food sector accounted for 2.2 percentage points (pp) of this growth, the food sector 0.4 pp, retailers that sell mainly online or through mail order (non-store retailing) provided 0.2 pp of the growth, while the fuel sector provided a negative contribution of 0.1 pp.

In August 2012, for every pound spent on retail goods approximately 42 pence was spent in the non-food store sector, 41 pence in the food sector, 12 pence in fuel stations and 5 pence in non-store retailing. More information on the sectors and types of store within the retail sector can be found in the reference table RSI Index Categories and the Weights (37.5 Kb Excel sheet)

Non-food sector

In August 2012, the amount of goods bought (volume) in the non-food sector increased by 5.0 per cent compared with August 2011. Department stores (non-specialised stores), stores selling textiles, clothing and footwear and other stores (which includes for example stores selling sporting goods and toys, watches and jewellery, and computers and telecoms) all saw an increase in sales, while in household goods stores less goods were sold.

The largest contribution to growth in the non-food sector came from the other stores category in particular sporting goods and toys. Feedback from these stores suggests that sales were boosted by an increase in sales of football shirts with the start of the new season and the European Championship but also from increased sales as a result of the Olympics. 

The price of goods sold in the non-food sector fell by 1.1 per cent compared with August 2011. A fall was seen across all store types in the sector. The Consumer Prices Index identified a fall in the price of clothing and footwear and household goods which form part of the non-food sector. 

Internet sales

In August 2012, Internet sales (online sales for all retailers) were estimated to be 8.1 per cent of all retail sales (excluding automotive fuel). This is a fall from 9.0 per cent in July 2012 and the lowest proportion since August 2011 (7.8 per cent).

Figure 1: Internet sales as a proportion of all retailing

Figure 1: Internet sales as a proportion of all retailing

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Internet sales as a proportion of all retail sales have previously shown a seasonal pattern with the highest proportion of Internet sales in the November of each year.  In previous years the lowest proportion of Internet sales has tended to fall in the second quarter of the calendar year (April, May, June). The proportion of Internet sales in August 2012 was estimated however to be lower than the second quarter of 2012. Feedback from online retailers suggests that sales were lower as consumers watched the Olympics instead of shopping online.

Longer Term Retail Sales Picture

The amount spent on goods in the retail sector (all retailing sales values) has been increasing since the beginning of the series in January 1996. The price of goods sold (or store price inflation) has continued to increase whilst the amount of goods bought increased up until 2007 and then stagnated up to August 2011. This indicates that since 2007, consumers have continued to buy a similar amount of goods but have spent more to do so. 

From August 2011, there has been some indication that the rate of price increases has slowed and consumers in Great Britain have been buying more. Feedback from retailers has suggested that the increase in sales is due to increased discounting.

Figure 2 shows the seasonally adjusted levels of the amount spent on retail goods (value) and the amount of goods bought (volume) in the retail sector. Also shown is the index level for the price of goods sold (non-seasonally adjusted).

Figure 2: All retailing (seasonally adjusted) and store price inflation

Figure 2: All retailing (seasonally adjusted) and store price inflation

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Retail Sales in detail

The Retail Sales Index (RSI) measures spending on retail goods (value) and the amount of goods bought (volume) in Great Britain. Figures are adjusted for seasonal variations unless otherwise stated and the reference year for both value and volume statistics is 2009=100.

For an explanation of the terms used in this bulletin, please see the background notes section. Care should be taken when using the month-on-month growth rates due to their volatility; an assessment of the quality of the retail statistics is available in the background notes.

Table 2: Seasonally Adjusted Year-on-Year Growth Rates and Contribution to all Retailing by Sector

      % of all retailing Volume year-on-year growth (%) Contribution to all retailing (% points) Value year-on-year growth (%) Contribution to all retailing (% points)
  All retailing  100.0 2.7 3.0 : 
               
Predominantly food stores 41.3 0.9 0.4 3.0 1.2
               
Predominantly non-food stores          
Total     41.6 5.0 2.2 3.8 1.6
Non-specialised stores 7.8 8.0 0.7 6.2 0.5
Textile, clothing and footwear stores 12.3 4.1 0.6 3.9 0.5
Household goods stores 8.8 -0.6 -0.1 -1.0 -0.1
Other stores   12.7 7.9 1.0 5.5 0.7
               
Non-store retailing   5.3 4.2 0.2 3.2 0.2
               
Automotive fuel     11.8 -1.0 -0.1 -0.4 0.0

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Amount spent in retail

In the four week period of August 2012 the total non-seasonally adjusted value of spending in the retail sector was estimated to be £26.0 billion. This compares with the revised figure of £26.6 billion in the four weeks of July 2012 and £25.3 billion in the four weeks of August 2011.

This equates to an average weekly spend of £6.5 billion in August 2012, £6.6 billion in July 2012 and £6.3 billion in August 2011.

Internet sales

Key points

  • Average weekly Internet sales values (non-seasonally adjusted) in August 2012 were estimated to be £466.1 million, which was an increase of 7.5 per cent when compared with August 2011.

  • Internet sales were estimated to account for 8.1 per cent of all retail spending excluding automotive fuel.

  • The non-store retailing sector had the largest proportion of Internet sales in August 2012 accounting for 61.2 per cent of all spending in this sector, down from 62.0 per cent in August 2011. The food sector had the lowest proportion of Internet sales accounting for 2.9 per cent, up from 2.4 per cent a year earlier.

Internet sales in detail

Internet sales measure how much was spent online through retailers in Great Britain. Figures are non-seasonally adjusted and the reference year is 2010=100. Table 3 shows the year-on-year growth rates for total Internet sales, by sector and the contribution that each sector makes to total Internet sales.

Table 3: Internet sales summary of performance for August 2012

Category Weight Year on year growth Contribution to year on year growth
All retailing 100 7.5 :
All food 17.3 20.7 3.3
All non-food 41.4 9.8 3.8
  Department stores 7.0 21.2 1.4
  Textile, clothing and footwear stores 11.7 9.4 1.0
  Household goods stores 8.2 5.2 0.4
  Other stores 14.5 6.9 1.0
Non-store retailing 41.3 1.3 0.4

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Sector summary

  • Predominantly food stores in August 2012 saw an increase in the amount of goods bought (0.9 per cent) and the amount spent (3.0 per cent) when compared with August 2011. Average prices were estimated to have increased by 2.0 per cent in the year to August 2012. In August 2012 the estimated average weekly sales were £2.7 billion; of this, 2.9 per cent of sales (£79.3 million) were made via the Internet.

  • Predominantly non-food stores in August 2012 saw an increase in the amount of goods bought (5.0 per cent) and the amount spent (3.8 per cent) when compared with August 2011. The year-on-year increase in the amount of goods bought was the highest since January 2011 when it increased by 7.1 per cent. Average prices were estimated to have decreased by 1.1 per cent in the year to August 2012.  This was the lowest since October 2009 (minus 1.3 per cent). In August 2012 estimated average weekly sales were £2.6 billion; of this, 6.9 per cent of sales (£183.1 million) were made via the Internet.

  • Non-specialised stores in August 2012 saw an increase in the amount of goods bought (8.0 per cent) and the amount spent (6.2 per cent) when compared with August 2011. Average prices were estimated to have decreased by 1.7 per cent in the year to August 2012. This was the lowest since January 2009 (minus 2.1 per cent). In August 2012 estimated average weekly sales were £0.5 billion; of this, 6.7 per cent of sales (£33.1 million) were made via the Internet.

  • Textile, clothing and footwear stores in August 2012 saw an increase in the amount of goods bought (4.1 per cent) and the amount spent (3.9 per cent) when compared with August 2011. The year-on-year increase in the amount of goods bought was the highest since December 2011 when it increased by 7.2 per cent. Average prices were estimated to have decreased by 0.2 per cent in the year to August 2012. In August 2012 estimated average weekly sales were £0.8 billion; of this, 7.8 per cent of sales (£60.4 million) were made via the Internet.

  • Household goods stores in August 2012 saw a decrease in the amount of goods bought (0.6 per cent) and the amount spent (1.0 per cent) when compared with August 2011. Average prices were estimated to have decreased by 0.2 per cent in the year to August 2012. In August 2012 estimated average weekly sales were £0.5 billion; of this, 5.0 per cent of sales (£27.6 million) were made via the Internet.

  • Other stores in August 2012 saw an increase in the amount of goods bought (7.9 per cent) and the amount spent (5.5 per cent) when compared with August 2011. The year-on-year increase in the amount spent on retail goods was the highest since January 2011 when it increased by 11.2 per cent. Average prices were estimated to have decreased by 2.3 per cent in the year to August 2012. This is the lowest value since records began. In August 2012 estimated average weekly sales were £0.8 billion; of this, 7.5 per cent of sales (£62.0 million) were made via the Internet.

  • Non-store retailing in August 2012 saw an increase in the amount of goods bought (4.2 per cent) and the amount spent (3.2 per cent) when compared with August 2011. The year-on-year increase in the amount spent on retail goods was the lowest since March 2009 when it increased by 2.4 per cent. In August 2012 estimated average weekly sales were £0.3 billion; of this, 61.2 per cent of sales (£203.7 million) were made via the Internet.

  • Predominantly automotive fuel stores in August 2012 saw a decrease in the amount of goods bought (1.0 per cent) and the amount spent (0.4 per cent) when compared with August 2011. Average prices were estimated to have increased by 0.4 per cent in the year to August 2012. In August 2012 estimated average weekly sales were £0.8 billion.

Distribution analysis

Table 4 illustrates the mix of experiences among different sized retailers. It shows the distribution of reported change in sales values of businesses in the RSI sample, ranked by size of business (based on number of employees).

This table shows for example, that the largest retailers, with 100 or more employees, reported an average increase in sales of 2.9 per cent between August 2011 and August 2012. In contrast smaller retailers employing 10 to 39 employees reported an average increase in sales of 9.1 per cent.

Table 4: Changes in reported retail sales values between August 2011 and August 2012: Standard reporting periods (by size of business)

Number of employees Weights (%) Growth since August 2011 (%)
100+ 77.4 2.9
40-99 2.2 7.3
10-39 6.6 9.1
0-9 13.8 2.4

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Analysis of individual returns from businesses

The reference table, Business Analysis (30.5 Kb Excel sheet) shows the extent to which individual businesses experienced actual changes in their sales between August 2011 and August 2012. The table contains information only from businesses that reported in August 2011 and August 2012.

Cells with values less than 10 are suppressed for some classification categories; this is denoted by n.a.. Note that ‘large’ businesses  are defined as those with 100+ employees and 10–99 employees with annual turnover of more than £60 million, while ‘small and medium’ is defined as 0–99 employees.

Background notes

  1. Improvements to be introduced next month

    The findings of the annual Seasonal Adjustment Review will be implemented.

  2. What’s New:

    No changes were introduced this month.

    Code of Practice for Official Statistics:

    National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

  3. Special Events

    The Olympics took place from 27 July to 12 August 2012 (with a few events starting on 25 July), and the Paralympics from 29 August to 9 September. For most economic statistics, any direct effects of the Olympics will be mainly seen in the August estimates.

    A few series (such as on international travel and tourism, employment) may have been affected in July, and these estimates have already been published . Wider effects, for example if the presence of the Olympics has influenced the number of non-Olympics tourist visits, may of course affect any of the summer months.

    This commentary is intended to help users to interpret the statistics in the light of events. As explained in ONS’s Special Events policy, it is not possible to make an estimate of the effect of the Olympics and Paralympics on particular series only on the basis of information collected in those series. More details of how certain series are affected are in an Information Note, and an article explaining how various elements are reflected in the National Accounts was published in July 2012.

  4. Understanding the data

    1.  Quick Guide to the Retail Sales Index  (195 Kb Pdf)

    2. Interpreting the data

    The Retail Sales Index (RSI) is derived from a monthly survey of 5,000 businesses in Great Britain. The sample represents the whole retail sector and includes all large retailers and a representative panel of smaller businesses. Collectively all of these businesses cover approximately 95 per cent of the retail sector in terms of turnover.

    The RSI covers sales only from businesses registered as retailers according to the Standard Industrial Classification (SIC), an internationally agreed convention for classifying industries. The retail sector is division 47 of the SIC 2007 and retailing is defined as the sale of goods to the general public for household consumption.

    Consequently, the RSI includes all Internet businesses whose primary function is retailing and also covers Internet sales by other British retailers, such as online sales by supermarkets, department stores and catalogue companies. The RSI does not cover household spending on services bought from the retail sector as it is designed to only cover goods.

    Respondents are asked to separate out the non-goods elements of their sales, for example income from cafeterias. Consequently, online sales of services by retailers, such as car insurance, would also be excluded.

    The monthly survey collects two figures from each sampled business: the total turnover for retail sales for the standard trading period, and a separate figure for sales made over the Internet. The total turnover will include Internet sales. The separation of the Internet sales figure allows an estimate relating to Internet sales to be calculated separately.

    3. Definitions and explanations

    The value or current price series records the growth since the base period (currently 2009) of the value of sales ‘through the till’ before any adjustment for the effects of price changes.

    The volume or constant price series are constructed by removing the effect of price changes from the value series. The Consumer Prices Index (CPI) is the main source of the information required on price changes. In brief, a deflator for each type of store (5-digit SIC) is derived by weighting together the CPIs for the appropriate commodities, the weights being based on the pattern of sales in the base year. These deflators are then applied to the value data to produce volume series.

    The implied deflator or store price inflation is derived by comparing the value and volume data non-seasonally adjusted. In general, this implied price deflator should be quite close to the retail component of the CPI.

    4. U se of the data

    The value and volume measures of retail sales estimates are widely used in private and public sector organisations. For example, private sector institutions such as investment banks, the retail sector itself and retail groups use the data to inform decisions on the current economic performance of the retail sector, these organisations are most interested in a long term view of the retail sector that can be obtained from year-on-year growth rates.

    Public sector institutions use the data to assist in informed decision and policy making and tend to be most interested in a snapshot view of the retail sector, which is taken from the month-on-month growth rates.

     

  5. Methods

    Information on retail sales methodology is available in Retail Sales Methodology and Articles.

    Composition of the data

    Estimates in this statistical bulletin are based on financial data collected through the monthly Retail Sales Inquiry. The response rates for the current month reflect the response rates at the time of publication. Late returns for the previous month’s data are included in the results each month. Response rates for historical periods are updated to reflect the current level of response at the time of this publication.

    Table 5: Overall Response Rates

    Overall response rates (per cent)
    Period   Turnover Questionnaire
    2012 Aug 93.7 69.7
    Jul 96.7 79.6
    Jun 96.4 80.4
      May 98.0 79.5

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    2. Seasonal adjustment

    Seasonally adjusted estimates are derived by estimating and removing calendar effects (for example Easter moving between March and April) and seasonal effects (for example increased spending in December as a result of Christmas) from the non-seasonally adjusted (NSA) estimates.

    Seasonal adjustment is performed each month, and reviewed each year, using the standard, widely used software, X-12-ARIMA. Before adjusting for seasonality, prior adjustments are made for calendar effects (where statistically significant), such as returns that do not comply with the standard trading period (see section Methods, Calendar effects), bank holidays, Easter and the day of the week on which Christmas occurs.

    The data collected from the retail sales survey is the amount of money taken through the tills of retailers; these are non-seasonally adjusted data. This data consists of three components:

    • Trend which describes long-term or underlying movements within the data.

    • Seasonal which describes regular variation around the trend, that is peaks and troughs within the time series, the most obvious in this case being the peak in December and the fall in January

    • Irregular or ‘noise’, for example deeper falls within the non-seasonally adjusted series due to harsh weather impacting on retail sales

    To ease interpretation of the underlying movements in the data, the seasonal adjustment process estimates and removes the seasonal component to leave a seasonally adjusted time series consisting of the trend and irregular components.

    In the non-seasonally adjusted retail sales index we see large rises in December each year and a fall in the following January, but these are not evident in the seasonally adjusted index. This peak in December is larger than the subsequent fall but the trend and irregular components in both months are likely to be similar, meaning that the movements in the unadjusted series are almost completely as a result of the seasonal pattern.

    3. Calendar effects

    The calculation of the RSI has an adjustment to compensate for calendar effects that arise from the differences in the reporting periods. The reporting period for August 2012 was 29 July 2012 to 25 August 2012, compared with 31 July 2011 to 27 August 2011 the previous year. Table 6 shows the differences between the calendar and seasonally adjusted estimates.

    Table 6: Retail Sales, Calendar Effects

    Year on year percentage change
    Value Volume
    Calendar adjusted 2.9 2.7
    Seasonally adjusted 3.0 2.7

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  6. Quality

    1. Basic quality information

    The standard reporting periods can change over time due to the movement of the calendar. Every five or six years the standard reporting periods are brought back into line by adding an extra week. For example, January is typically a four-week standard period but January 1986, 1991, 1996, 2002 and 2008 were all five-week standard periods.

    The non-seasonally adjusted estimates will still contain calendar effects. If the non-seasonally adjusted estimates are used for analysis this can lead to a distortion depending on the timing of the standard reporting period in relation to the calendar, previous reporting periods and how trading activity changes over time.

    The non-seasonally adjusted series contain elements relating to the impact of the standard reporting period, moving seasonality and trading day activity. When making comparisons it is recommended that users focus on the seasonally adjusted estimates as these have the systematic calendar related component removed.

    Due to the volatility of the monthly data, it is recommended that growth rates are calculated using an average of the latest three months of the seasonally adjusted estimates.

    When interpreting the data, consideration should be given to the relative weighted contributions of the sectors within the all retailing series. Based on SIC 2007 data, total retail sales consists of: predominantly food stores 41.3 per cent, predominantly non-food stores 41.6 per cent, non-store retailing 5.3 per cent and automotive fuel 11.8 per cent

    2. Standard errors

    The standard error of an index movement is a measure of the spread of possible estimates of that movement likely to be obtained when taking a range of different samples of retail companies of the same size. This provides a means of assessing the accuracy of the estimate: the lower the standard error, the more confident one can be that the estimate is close to the true value for the retail population.

    An approximate 95 per cent confidence interval for the index movement is roughly twice the standard error. The paper ‘ Measuring the accuracy of the Retail Sales Index’, (1.04 Mb Pdf) written by Winton, J and Ralph, J (2011) reports on the calculation of standard errors for month-on-month and year-on-year growth rates in the RSI as well as providing an overview of standard errors and how they can be interpreted.

    The standard error for year-on-year growth in all retail sales volumes is 0.7 per cent. Using a 95 per cent confidence interval this means that the year-on-year growth rate for all retail sales volumes falls within the range 2.4 ± 1.4 per cent.

    The standard error for month-on-month growth in all retail sales volumes is 0.4 per cent. Using a 95 per cent confidence interval this means that the month-on-month growth rate for all retail sales volumes falls within the confidence interval 1.8 ± 0.8.

    3. Summary quality report

    A Summary Quality Report (114 Kb Pdf) for the RSI is available on the ONS website.

    This report describes, in detail the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.

    4. Revision triangles

    Revisions to data provide one indication of the reliability of key indicators. The table below shows summary information on the size and direction of the revisions which have been made to the volume data covering a five-year period. Note that changes in definition and classification mean that the revision analysis is not conceptually the same over time. A statistical test has been applied which has shown that the average revision in month-to-month statistics are not statistically different from zero.

    A spreadsheet giving these estimates and the calculations behind the averages in the table is available on the ONS website.

    Table 7: All Retailing, Volume Seasonally Adjusted, Revisions Triangles Summary, August 2012

    Volume, seasonally adjusted
    Revisions between first publication and estimates twelve months later (percentage points)  
    Growth in latest period (per cent) Average over the last five years (mean revision) Average over the last five years without regard to sign (average absolute revision)
    Latest three months compared with previous three months 0.6 -0.24 0.36
    Latest month compared with previous month -0.2 -0.11 0.45

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  7. Relevant links

    Methodological changes were introduced in the April 2009 and January 2010 releases. For more details see:

  8. Publication Policy

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the organisations given pre-publication access (38.5 Kb Pdf) to the contents of this bulletin.

  9. Accessing data

    The complete run of data in the tables of this statistical bulletin is available to view and download in electronic format using the ONS Time Series Data service. Users can download the complete bulletin in a choice of zipped formats, or view and download their own sections of individual series. The Time Series Data are available.

    Alternatively, for low-cost tailored data call 0845 601 3034 or email info@ons.gsi.gov.uk

  10. Copyright and reproduction

    © Crown copyright 2012

    Under the terms of the Open Government Licence and UK Government Licensing Framework, anyone wishing to use or re-use ONS material, whether commercially or privately, may do so freely without a specific application for a licence, subject to the conditions of the OGL and the Framework.

    For further information, contact the Office of Public Sector Information, Crown Copyright Licensing and Public Sector Information, Kew, Richmond, Surrey, TW9 4DU.

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    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

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Kate Davies +44 (0)1633 455602 ONS retail.sales.enquiries@ons.gsi.gov.uk
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