Clothes shops report poor sales performance

Clothes stores reported their worst performance for nearly three years this month despite signs of better trading for other retailers.

A balance of 2% of firms reported that volumes were lower than the previous year, according to the CBI, which was much better than the 22% fall in January when retailers suffered a New Year hangover. The City had expected a 10% fall.

But gains were mainly felt by grocers and internet retailers, while clothes stores suffered their worst performance since March 2009 and shoppers continued to avoid big-ticket purchases such as homewares.

Retailers do not expect the improvement to last, with sentiment about the next three months negative for the fifth quarter in a row, and investment plans at their weakest for three years.

But there was some good news for consumers, as shop price inflation was at its lowest for more than a year.

Judith McKenna, chair of the CBI distributive trades panel and Asda's chief operating officer, said: "It's good to see there are more positive signs on our high streets.

"But consumers are clearly continuing to focus their spending on day-to-day needs, rather than big-ticket or luxury items.

"With disposable incomes under constant pressure, retailers remain concerned about the general business outlook for the rest of 2012."

PA