News
UK Retail Sales Fall By 1.8%
19/02/2010
By Lea Pachta
The Office for National Statistics (ONS) has reported that retail sales have slumped by 1.8% between December and January, the sharpest fall in 18 months.
The reduction of retail sales was three times as quick as analysts have predicted.
ONS said the heavy snowfall at the beginning of the month has contributed to the poor sales, pushing sales of household goods and petrol down.
The seasonally adjusted volume of retail sales in January 2010 rose by 0.9 per cent
compared with January 2009.
Richard Lowe, Head of Retail and Wholesale, Barclays commented:
"The drop in retail sales in January comes as no surprise as consumers reined in spending after Christmas. However, the magnitude was far greater than commentators expected.
"Treacherous weather conditions deterred shoppers from the high street for part of January, although the official data suggest that even internet retailers could not escape the Christmas hangover. In contrast, retailers of clothing saw sales volumes surge, as prices fell and appetite remained strong for winter lines.
"The post-Christmas sales meant that a number of retailers postponed the reinstating of VAT at 17.5 per cent and focused on seasonal discounts, although it remains to be seen to what extent the rise will dampen demand going forward. There is widespread speculation amongst businesses that VAT will rise further later in the year following the general election, and retailers are already factoring this into their budgets." 
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