Shoppers spent less in December, with the volume of retail sales falling 0.7 per cent compared with the previous year, after adjusting for deflation. In dollar terms, sales fell 1.9 per cent to $15.5 billion, ending a year that saw the value of sales shrink 4.1 per cent and the volume decline 2.6 per cent. But the figures compared favourably with November figures, when sales shrank a revised 2.8 per cent by value to $13.4 billion and 1.5 per cent after adjusting for deflation from the same month in 2001. December's sales decline was the lowest for the year. By value, retail sales have fallen in 17 of the past 18 months, with only February showing growth because of the Lunar New Year holidays. An economist with JPMorgan Chase, Ben Simpfendorfer, said taken by themselves, the numbers distorted personal spending. 'There was no disappointment,' Mr Simpfendorfer said. 'It confirms a strengthening trend in spending. Retail sales data exaggerates the weakness in consumption' because they account for 40 per cent of total private consumption spending, while spending on services accounts for the remaining 60 per cent. 'The basic message is we're encouraged by the month-on-month improvement. At this rate we expect to see volume growth next quarter,' he said. As well as spending on services, the retail sales figures also do not include purchases made from non-traditional sales outlets such as Internet retailers, which are the fastest growing sectors of consumer activity. Neither do the figures track spending by residents outside Hong Kong in places like Shenzhen. Sales of fuel led December's decline, tumbling 15.2 per cent from the same month a year before. Sales of jewellery and expensive gifts dropped 14.7 per cent.