Pre-Christmas retail uplift 'won't last'
Tuesday 20 December 2011
A spate of early discounting has helped retailers attract shoppers before Christmas, but the uplift is not expected to last into the new year, a survey revealed today.
Business body CBI said retail sales volumes rose in December for the first time in seven months, with a balance of 9% of traders reporting an increase on a year ago when Arctic weather conditions kept shoppers at home.
Sales of food, toys and items sold via the internet all enjoyed strong growth, but consumers remained wary of buying "big ticket items" such as fridges and washing machines, and overall volumes were still below normal.
Expectations for next month remain bleak, with retailers forecasting that volumes will decline again despite it being a time of the year when shoppers are normally attracted by January sales.
Asda chief financial officer Judith McKenna, who is also chair of the CBI's distributive trades panel, 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 all important gifts for the family."
Samuel Tombs, of Capital Economics, said the survey suggested that pre-Christmas trading "may not be the complete write-off that anecdotal evidence had been suggesting".
But he added: "The woeful state of consumers' finances suggests that, even if festive trading turns out to be brisk, the chances are high that the post-Christmas spending hangover is even deeper than usual."
Department stores reported slightly better sales following four months of declines. Hardware and DIY stores and shoe shops reported large declines, although clothes sales were flat and furniture and carpet stores enjoyed growth compared with the previous year.
Chris Williamson, chief economist at Markit, said: "The survey showed sales rising at the fastest rate since May, but the increase was driven by discounting, meaning retailers' profit margins are likely to be under intense pressure.
"Retailers expect January sales to be the weakest since August 2009, perhaps reflecting the fact that January sales are in effect already taking place in December in many cases."
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 3 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 5 Charles Kennedy 'had better judgement drunk than many sober politicians' says Ian Hislop
California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
Amber Peat: Body found in search for missing 13-year-old who left house after argument with her parents
School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
Isis executes three gay men by dangling them from top of 100ft building and letting go
Alton Towers crash: Four guests seriously injured as Smiler ride carriages collide
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...