BRITISH consumers returned to the high street in their droves in the first half of February, after January’s cold snap kept them at home.
The Confederation for British Industry (CBI) said that in early February retailers had seen the strongest annual growth in sales volumes since May 2007.
Almost half of all firms surveyed (46 per cent) said sales had risen compared to 23 per cent saying they had fallen and a net 16 per cent of retailers expect that March will also show an improvement.
Supermarkets and shops selling clothes, household goods, furniture and carpets recorded the biggest annual increases but the CBI warned that such an improvement was unlikely to be repeated.
The CBI’s chief economic adviser Ian McCafferty said: “There should be further year-on-year growth in March but at a more modest pace than what we are recording in February.”
Andy Clarke, chief operating officer of Asda, said: “While retailers see some growth ahead, the road to recovery through 2010 is likely to be fragile. Worries about the economy and upcoming pay freezes are likely to ensure that shoppers remain cautious.”
He added: “Last year was challenging and this year is going to be eqully challenging...the next four months are going to be pretty tough.”
It wasn’t just retail volumes that increased. Retail prices grew strongly in February, reflecting the VAT hike at the start of 2010. Prices are expected to rise at a similar pace next month. There was talk that consumers had brought forward big-ticket purchases ahead of the VAT increase. The CBI said there was no sign of that in the data but added that the weather disruption in January made it difficult to tell.
In another sign of improving sentiment, the GfK/NOP Consumer Confidence Index rose by three points this month to -14. This is 21 points higher than in February 2009. Also encouraging was the improving confidence in consumers’ expectations for personal finance as well as the general economic situation.