The opening half of December failed to yield strong sales for retailers and they expect tough times ahead in the new year, according to a new survey out today.
Only 13% of retailers recorded higher sales volumes than a year ago in this period, while 67% said they were lower, the Confederation of British Industry (CBI) reported.
The resulting balance of -55 is worse than the sector had predicted and is the worst set of figures recorded since the survey began 25 years ago.
Chairman of the CBI Distributive Trades Panel and Asda’s retail director Andy Clarke said: “The next week will be nail-bitingly tense for retailers as they pin their hopes on a last-minute Christmas dash.
“We have already seen many stores bringing forward their sales and discounting goods deeply in order to entice customers into the shops.
“But with shoppers continuing to watch their pennies, it seems many are holding off doing their Christmas shopping in the hope of bagging a bargain.”
Earlier this month, Tesco cut prices of 1,000 items by up to 50% in an effort to urge cautious shoppers into its stores. It said they were waiting for extra discounts.
On the CBI survey, retailers remained pessimistic about future prospects for the industry.
A balance of 49% of those polled said they think sales will be lower in January than they were in the same month this year.
The three-month moving average of sales volumes dropped further to a balance of -43.
Clarke added: “It is still too early to say whether the recent cuts in interest rates and VAT will help lift consumer spending.
“Retailers are bracing themselves for a particularly challenging festive season with little prospect of good cheer in 2009.”
Marks & Spencer has held two 20%-off sales to encourage people into its stores.
It has also been reported today that Tesco is to open almost 200 stores on Boxing Day to generate a sales lift.
