January 26 2012

Retail sales fell in January, as shoppers reined in their spending after taking advantage of early discounting last month, according to research from the CBI.

The latest monthly CBI Distributive Trades Survey, which covers the first two weeks in January, found that 44% of retailers said sales volumes were down on the same period of the previous year. Some 22% said they saw sales rise in January, leading to a balance of 22%, the lowest since March 2009. The CBI said that retailers expect annual sales volumes to continue to fall, albeit at a slower pace than this month, down 10%. Clothing retailers saw growth slow over the period, with 8% seeing volume growth against 64% in January of 2011. Footwear and leather fared badly, with 48% if retailers surveyed seeing a decline, against 66% growth in the same period last year. This, however, was an improvement on December, when 77% of footwear and leather retailers posted a decline. Non-specialised retailers, such as department stores, also reported a drop in sales volumes over the period, down 34%.

CBI chief economic advisor Ian McCafferty said “Shoppers have reined-in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales. Family budgets are under continuing pressure with inflation still high and wage increases modest.”