SHOPPERS cut back in January and are expected to slash spending further, retailers told the Confederation of British Industry’s (CBI) distributive trades survey, published yesterday.
Twice as many retailers reported that sales were down on January 2011 than reported a rise, with a net balance of 22 suffering a decline – the gloomiest position since March 2009.
The sharp drop contrasts with a net balance of nine per cent reporting a year-on-year rise in sales in December, and resumes the downward trend seen in months before Christmas.
Looking to next month, 37 per cent of shops expect a fall in sales on February 2011 while only 27 per cent anticipate a rise in sales.
“Survey provides the first glimpse of retail conditions in January, and confirm fears that consumers retrenched after a mini spending spree in December,” said Markit economist Chris Williamson.
“Aggressive discounting helped push up sales in the lead up to Christmas, but the New Year has started with something of a hang-over on the high street. The consumer is not likely to help boost economic growth in early 2012, as low wage growth, still high inflation, debt and job security worries discourage spending.”
Experian’s footfall index, also published yesterday, showed a decline of 3.9 per cent year-on-year for the third week of January.