Surprise rise in retail sales revealed

 

The January sales helped retailers enjoy a surprise rise in trade last month but the figures failed to allay fears high streets will be blighted by more shop closures.

Sales volumes rose 0.9% between December and January, the strongest performance since the Royal Wedding and defying City expectations of a 0.4% fall, the Office for National Statistics (ONS) revealed.

Cash-strapped consumers splashed out on furniture and sportswear as a blizzard of promotions dragged shop price inflation to its lowest level for more than two years. But experts warned the discounts were unsustainable and high streets still face "another difficult year".

A separate survey today fuelled fears for the high street as it revealed that chains shut an average of 14 town centre shops a day last year as they increasingly shifted to retail parks and on to the internet. It warned further closures were expected.

The ONS figures do not reflect the full extent of the gloom on the high street, because much of January's growth was driven by internet sales and supermarkets.

British Retail Consortium director general Stephen Robertson said: "These numbers are slightly better than we would have expected but make it clear that price-cutting by retailers is what's driving any growth in business.

"Discounting is biting into retailers' margins with non-food businesses facing particularly tough times."

Mr Robertson called on Chancellor George Osborne to use next month's budget to take steps to make it more attractive for retailers to invest and create jobs, and reduce business rates, which are set to rise 5.6%.

Today's ONS figures were still seen as a welcome surprise, boosting hopes that the UK's economy can stave off another recession after the 0.2% fall in GDP in the final quarter of 2011.

The figures produced by the ONS are seasonally adjusted because January is normally a weaker shopping period than December, but they show that sales volumes in January were 2% higher than a year ago.

Excluding car fuel, volumes increased 1.2% between December and January.

Analysts had expected sales volumes to fall in January because many retailers brought forward special offers to before Christmas, sparking fears the normal January sales would have lost some of their traditional appeal.

Household goods sales saw their first sales growth for nearly a year, up 4.8% between December and January, as furniture stores put in a particularly strong performance with high levels of discounting.

The ONS also said there was anecdotal evidence that sportswear retailers had enjoyed a strong month.

The figures revealed that January's store prices were 2.2% higher than a year ago, the smallest rise since November 2009, as shoppers benefited from falling inflationary pressures and price cuts in the January sales. Every sector apart from clothes stores reported a slower rate of price increases than the previous month.

Samuel Tombs, an economist at Capital Economics, said even if the figures are taken at face value, there are reasons to think that the strong growth cannot be maintained.

He said: "January's strong growth goes against the much more pessimistic picture painted by anecdotal evidence and all of the retail surveys. Accordingly, the official figures may not be giving a true reflection of conditions on the high street.

"With unemployment on an upward trend, credit conditions tightening and real incomes still being squeezed, the underlying conditions for consumers are still tough."

Meanwhile, a survey of the 500 biggest town centres by PwC and the Local Data Company found last year was the first time since 2008 that multiple retailers failed to open as many stores as they closed.

They had previously been taking up the slack for independent retailers who had been worst hit by the economic downturn.

A previous report showed that an average of one in seven shops stood empty in 2011, with the vacancy rate rising above 30% in some parts of the country.

PA

PROMOTED VIDEO
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave long-running series
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
voices
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam