Retail sales figures bring some ‘limited cheer’

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Retail sales volumes grew in the year to December for the first time in seven months, though sales were considered poor for the time of year, the Confederation of British Industry (CBI) said.

Publishing its latest monthly distributive trades survey, which covers the first two weeks in December, the business organisation said retailers did not expect December’s modest sales growth to continue into the New Year, with annual sales volumes falling again in January.

While 41 per cent of companies said sales rose on a year ago in December, 32 per cent reported a fall, giving a balance of plus 9 per cent. This was better than expected, and the first year-on-year sales growth since May.

However, volumes of sales were poor for the time of year, with a balance of minus 16 per cent well below the long-run average. The three-month moving average, which smooths out monthly peaks and troughs, was negative for the fifth month running and is expected to remain so in January.

Judith McKenna, chair of the CBI distributive trades panel and Asda’s chief operating officer, said: “Early discounting helped retailers add a little extra sparkle to their sales in December, although the reprieve appears to only be temporary as they don’t expect sales to continue to grow into January.

“Consumers are continuing to hold off on purchasing big ticket items, including durable household goods, preferring to use their hard-earned cash to stock up for Christmas dinner and gifts for the family.”

Richard Lowe, head of retail and wholesale at Barclays Corporate, said in response to the findings: “The snow has held off and despite a slow start, the commercial side of Christmas is well and truly underway with the high street bustling with shoppers and sales volumes up for the first time in seven months.

“The next four days will be the most important of the year and retailers will be counting on promotions to pull in the crowds and keep the tills ringing until late into the night on Christmas Eve.”

IHS Global Insight said the survey offers “limited seasonal cheer for retailers”.

It said: “While much better than feared and at the risk of coming across as a ‘Bah Humbug Economist’, it must be noted that the December retail sales survey from the CBI is far from buoyant and it fails to mask an underlying worrying picture.”