UK Retailers enjoyed a third consecutive month of sales growth as the festive season got under way but are expecting business to fall flat the New Year, according to the CBI’s Distributive Trades Survey.
The survey showed that in the year to 9 December 2009, retailers maintained year-on-year sales growth at November’s levels, led by a strong performance from grocers and durable household goods.
Asked about sales over the last year, 45% of respondents said they had risen, while 32% reported a fall. The resulting balance of +13% was slightly lower than had been expected (+19%), but matched November’s figure.
Sales for the time of year were reported to be poor by a balance of 16% of retailers, and a net 13% expected sales to remain below seasonal norms in January.
Beating the VAT rise
Andy Clarke, chairman of the CBI Distributive Trades Panel, and chief operating officer of Asda, said: “With a week left to go until Christmas, retailers may yet benefit from a flurry of last-minute sales and from shoppers bringing forward spending to beat the VAT rise.
“Grocers have continued to enjoy strong growth after some fierce price-cutting.
“Although individual retailers may post healthy-looking Christmas numbers compared to the same time last year when we were in the grip of the recession, conditions across the whole of the sector are likely to remain challenging in 2010.The recent growth in retail sector sales is expected to fizzle out in the New Year.
“Meanwhile, retailers also face the additional challenge of having to change the prices of everything on the shelves to comply with the VAT rise during their busiest trading period.”
