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High Street shoppers
Fair weather friends: after a strong December, shoppers were put off by the snow

High streets reeling after worst January in 15 years

09.02.10

Snow and economic struggles gave Britain's high streets their worst January in 15 years, the British Retail Consortium said today.

The “awful” start to the year hit hopes of a strong retail recovery after the strongest December for eight years.

Total sales rose 1.2 per cent year on year, the lowest reading for the month since the BRC's Retail Sales Monitor began in 1995. Same-store sales values fell 0.7 per cent, the worst figure for 14 years.

The figures compared with economists' expectations of 3.3 per cent total sales growth and like-for-like increases of 0.5 per cent. They also collapsed from the rises of six per cent and 4.2 per cent in December.

Severe weather deterred shoppers at the beginning of the month, while economic uncertainty and the impact of the VAT rate's return to 17.5 per cent caused consumers to focus on essentials. Food sales were up at the start of the month as consumers stocked up on frozen and tinned food, pies, pizzas and puddings.

Online sales were higher amid the snow disruption, with non-food sales including mail order and telephone orders up 14.6 per cent over the month.

However, clothing was lower than in December and customers focused on outerwear, woollens and skiwear in the cold spell. Boots were popular, while in an otherwise depressed homewares market electric blankets and bedding had gains.

Customers were still feeling the effects of recession as sales and discounts drove purchases in department stores and home electronics. DIY was among the worst performing sectors in the cold snap as householders put off outdoor chores — although sales of shovels, salt and grit were “excellent”. Furniture also underperformed, with sales sharply below already weak levels the year before.

The declines were the worst since last March, although clearance discounts on fitted kitchens and upholstery did provide a rare uplift.

Stephen Robertson, BRC director-general, said: “An awful start to the year and in stark contrast to an upbeat December.”

He said the higher rate of VAT at the start of the month caused some consumers to spend more in December, but that shoppers were also becoming more cautious “in the face of economic and political uncertainty”.

“Retailers will be hoping these results are mainly a snow induced blip, rather than an indication of further difficulties,” he added.

Helen Dickinson, head of retail at KPMG, which co-authors the report, said January's results were partially flattered by higher shop prices because of the VAT hike: “The underlying trend is difficult to read but there is no doubt that the strong sales we saw in December 2009 are not indicative of the trend for the rest of this year.”

Reader views (3)

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Lets face it after Xmas the pot is empty and most of it would be on credit cards

- Richard Edmunds, Rayleigh UK, 09/02/2010 11:46
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I don't get it, I thought Brown had saved the world from economic malaise?

- Londoner, London, 09/02/2010 10:52
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The weather is a factor, but people are paying off credit cards due to their fear of unemployment or cut wages. I take this as a good sign that individuals' are taking responsibility - the credit card spending madness must stop.

- Andrew, London, 09/02/2010 09:42
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