Retailers have reported a marked year-on-year fall in sales volumes in January, although one that was broadly in line with expectations. Retailers anticipate that annual sales will fall once again in February, according to the CBI’s monthly Distributive Trades Survey.
For the first two weeks of January, the survey found 44% of retailers saw sales volumes fall on a year ago, while 22% reported a rise, giving a balance of -22%. This was the worst result since March 2009, but was broadly in line with expectations.
Retailers also expect annual sales volumes to continue to fall in February, albeit it at a slower pace than this month.
There was a mixed picture across the sub-sectors. Online and mail order retailers fared best, with more than half of those surveyed reporting annual growth. Clothing was +8% but footwear and leather goods was -48%.
Ian McCafferty, CBI chief economic adviser, suggests the retail market continues to battle significant headwinds. “Shoppers have reined-in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales.
“Family budgets are under continuing pressure with inflation still high and wage increases modest.
“Consumers are still holding off particularly from buying big ticket items like washing machines and fridges. Online and mail order sales were the only areas that performed well in January, but growth was still down on last month.”