Bleak Christmas and New Year in store for retailers
According to the Confederation of British Industry’s (CBI) December Distributive Trades Survey, retailers recorded the weakest sales growth in over a year during the first fortnight of the build-up to Christmas, and the prospects are looking no brighter for the New Year as most retailers expect sales in January to be down on a year ago, especially in the footwear and leather sectors.
Although 42% of outlets recorded higher year-on-year sales volumes in the first half of December, some 33% saw sales drop, leading to a balance of +8% — the weakest since November 2006.
At the end of a very strong year for footwear and leather retailers’ sales fell sharply (a balance of -87%) while as a result of the ‘credit crunch’ sales continued to fall in sectors related to the housing market such as furniture and carpets (a balance of -11%), durable household goods (-7%) and hardware, china & DIY (-4%).
Commenting on the latest figures, John Longworth, chairman of the CBI's Distributive Trades panel said: "We're coming to the end of what's been a successful year for many on the high street. So, sales growth in the first part of December seems relatively more disappointing when compared with last year's pre-Christmas period and the first half of 2007. Retailers will be hoping that shoppers plan to fill their stockings late, especially as Christmas falls soon after the weekend this year. But the outlook for January does not fill them with cheer as they expect a slight fall in sales.”
