Plan B curbs that swept Brits away from the high street and offices throttled UK retailers this month, reveals a closely watched survey published today.
The re-emergence of restrictions on daily life that dragged on throughout January hit high street sales, according to research carried out by the UK’s largest business group, the Confederation of British Industry (CBI).
A net balance of minus 23 per cent of retailers registered a weaker than expected performance in January, down from minus two per cent in December.
Consumer confidence has been knocked by a combination of tighter measures on socialising and the rapid spread of the Omicron variant driving up Covid-19 cases, prompting Brits to pull back on spending.
Ben Jones, lead economist at the CBI, said: “It was not surprising that retail sales dropped back below seasonal norms in January, given the spread of Omicron, the reintroduction of restrictions late last year and increased consumer caution.”
Retailers are pessimistic about sales growing quicker than the yearly trend in February despite the end of Plan B measures today, the CBI said.
Meanwhile, soaring inflation eating into Brits’ real incomes weighing on spending for the year ahead, compounded by rising costs driven by higher energy bills and ongoing supply chain disruptions is threatening the profitability of the retail sector.
“The sector faces an inflation double whammy, as rising energy and transport costs erode households’ spending power and retailers’ own costs continue to mount,” Jones added.
The cost of living in Britain is running at its highest rate in nearly 30 years at 5.4 per cent.
Households are also set to be stung by a 1.25 percentage national insurance hike in April, casting doubt on whether consumer confidence will recover to boost retailers this year.