Well, that’s a turn up for the books. The CBI’s latest Distributive Trades Survey reckons that retailers have enjoyed a stronger than expected January so far, with the number of retailers reporting an increase in sales volumes outnumbering those reporting a decline by 17%. Analysts were expecting a far more muted score of 12%.
However, the ‘net balance’ is still down on December, when the CBI data recorded an optimistic +19% from retailers, and a very far cry from the +33% reading in November. The British high street is feeling pretty good about February, though, with the net balance of retailers expecting an increase in sales rising from +10% to +13%.
Nobody was expecting all that much from the January figures, to be honest. This month has already seen the demise of Blockbuster and Jessops, and a final dirge was being sung for HMV only last week before Hilco stepped in and saved the day. The latest batch of figures on industrial production from the ONS make for pretty grim reading too, as does the latest PPI data. All of this points to the very real threat of a triple dip recession.
To make matters worse, consumer’s incomes are being squeezed more than ever by high inflation. Average pay is rising at an annual rate of just 1.4%, while consumer prices are rising at a rate of 2.7%. This means that real pay is now falling at its fastest rate since last March.
There is another factor that could get throw a spanner in January’s works. This darned snow. The CBI’s data was collected between the 2nd and 16th January, and there is no doubt that the plummeting temperatures, transport issues and general slipperiness will have kept shoppers at home. Yes, our economy is on such thin ice that just three days of snow can send the UK careering away from growth.
Visa Europe has already noted a 4% downturn in household spending since the white stuff began to fall, so it is more than likely that revised figures will be published at the end of the month, presenting a far more downbeat assessment of retail spending in January.
You have been warned.