Economy: Upturn in retail sales unlikely to last, says CBI
A SPATE of early discounting has helped retailers attract shoppers ahead of Christmas, but the uplift is not expected to last into the new year, an industry survey revealed today.
The CBI business organisation reported an increase retail sales volumes 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 electrical appliances, and overall volumes were still below normal.
Department stores reported slightly better sales following four months of declines and carpet stores also enjoyed growth but hardware and DIY stores and shoe shops reported large declines while sales of clothes and furniture were flat.
And expectations for next month remain bleak, with retailers forecasting that volumes will decline again, despite the attraction of the 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.”
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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.”