New statistics from the CBI's Distributive Trades Survey show that sales on the High Street in early January declined eight per cent year-on-year, ending hopes that retailers were on track to enjoy three straight monthly increases.
The vicious cold snap in the early part of the month was mainly to blame, the report says, though there may also have been a damaging effect from the increase in VAT to 17.5 per cent.
2010 has opened on a weak footing, especially compared to the tail end growth of 2009, but the picture should stabilise in February,” CBI Distributive Trades Panel chairman and Asda COO said, according to The Retail Bulletin.
While grocers and shoe shops had a good start to the year, it has been slightly disappointing for the sector as a whole. The big freeze kept many shoppers away from the January sales and the VAT hike has hit bigger purchases like furniture and electricals.
Overall, the recovery through 2010 is likely to be tentative and weak with a long road to recovery, and consumers are still cautious about spending.”