Retailers hit as consumers cut spending

 
Tim Wallace
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RETAIL sales are continuing to slump as consumer spending power is hit by inflation, government spending restraint and the Eurozone crisis, according to research published yesterday by the Centre for Economics and Business Research (CEBR).

Spending is down 1.7 per cent compared with November, the CEBR claims, and down 0.3 per cent on last December – which itself was a poor month for retailers because of unusually bad weather.

Once high inflation has been taken into account, retail sales will be three per cent lower than last December’s – a fall of £970m.

However, there will be some bright spots as consumers will keep spending on food, according to separate research from Nielsen.

Supermarkets are forecast to take £3.5bn in the seven days to Christmas, up from £3.4bn in the same week of last year.

Over the 12-week Christmas trading period supermarket sales growth has increased 3.1 per cent on the year, down from growth of 4.7 per cent from 2009 to 2010.

Similarly department store John Lewis has bucked market trends with a jump of 10 per cent in year-on-year sales, hitting £1.13bn in the week to 17 December.

Nonetheless, sales figures from the British Retail Consortium show that for much of 2011, sales have been lower than in 2010, suggesting a grim picture for retailers this Christmas.