Economy: Growth in high street sales slows as consumers cut-back after Christmas
PUBLISHED: 16:03 23 January 2014 | UPDATED: 16:03 23 January 2014
High street sales growth slowed sharply at the beginning of January amid a post-Christmas cut-back in spending and slump in demand for warm clothes in unseasonably mild weather, according to new figures.
The latest distributive trades survey from the CBI revealed the worst reading from clothing retailers for nearly five years in a reversal of buoyant conditions in the run-up to Christmas.
A poll of 113 firms between January 2 and 15 revealed that 33% of retailers overall said sales rose in the year to January and 19% reported a fall, giving a balance of 14%.
This is far lower than the 34% reading for December, but the CBI said it was still an “encouraging” result.
Barry Williams, chairman of the CBI survey panel and chief merchandising officer for food at Asda, said: “At a time of year when shoppers are recovering from the excesses of Christmas and watching their spending carefully, it’s encouraging that high street sales have continued to grow.”
Retailers expect sales to grow modestly again next month, with a balance of 15% pencilling in a rise as the sector continues to recover from difficult conditions in October and November, when grocers, department stores and clothing shops had seen sales fall.
The CBI showed mixed fortunes this month, with the balance of minus 55% for clothing sales, marking the worst result since March 2009.
But this was offset by a plus 50% result for grocers in the sector’s best reading since September 2012 and a plus 44% balance for furniture and carpets stores.
Experts warned over the potential for a post Christmas hang-over on the high street last week after official retail sales figures showed an impressive 2.6% sales hike in December, which was far better than expected.
There are also fears over the impact of muted wage growth as salary rises continue to be outstripped by inflation.
Mr Williams said: “While retailers predict some modest growth ahead, the prospect of continually slow pay growth is likely to mean cautious consumers for some time to come.”