High street gloom as 2012 sales slump

 

The high street suffered a New Year hangover as retail sales put in their worst performance in nearly three years, a business lobby group said today.

The CBI said retail sales volumes fell in January, after modest growth in December, with a balance of 22% of traders reporting a decrease on a year ago, the lowest level since March 2009.

The majority of retailers said sales were disappointing for the time of year and orders were also down, with firms expecting levels to fall again next month, the CBI added.

Ian McCafferty, CBI chief economic adviser, said: "Shoppers have reined-in spending across the board at the start of the new year after taking advantage of early discounting last month, which boosted pre-Christmas sales."

Today's survey is likely to add to fears that the British economy is on course to fall back into recession, after official figures yesterday revealed gross domestic product (GDP) declined by a greater-than-expected 0.2% in the final quarter of last year.

The CBI said there was a mixed picture across retail sub-sectors, but with most reporting a fall in sales volumes on a year ago, including hardware and DIY, household goods and department stores.

Grocers saw a modest increase in sales, following a much stronger trading period last month. Supermarkets have been battling for customers with price-cutting campaigns and heavy promotions.

Mr McCafferty added: "Consumers are still holding off particularly from buying big-ticket items like washing machines and fridges."

The CBI survey was conducted between January 3 and January 17, with 135 firms taking part, of which 75 were retailers, 46 were wholesalers and 14 motor traders.

Retail sales returned to growth in the run-up to Christmas but businesses were forced to slash prices to bring in cash-strapped consumers, according to official figures.

The 0.6% rise in sales volumes in December, according to the Office for National Statistics, came as store-price inflation, the rate at which prices rise, fell to its lowest level for 16 months, from 3.6% to 2.4%.

Chris Williamson, chief economist at financial services information firm Markit, said: "Aggressive discounting helped push up sales in the lead-up to Christmas, but the New Year has started with something of a hangover on the high street.

"The survey is a reminder that the consumer is not likely to help boost economic growth in early 2012, as low wage growth, still high inflation, debt and job security worries discourage spending."

PA

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most