Shoppers cut back on buying presents

RETAIL sales put in their worst performance for eight months in December as snowy weather and money worries caused shoppers to cut back on buying Christmas presents, according to figures from the British Retail Consortium.

RETAIL sales put in their worst performance for eight months in December as snowy weather and money worries caused shoppers to cut back on buying Christmas presents, according to figures from the British Retail Consortium.

Retailers were already braced for a tough festive trading period as consumers reined in spending on non-essential items, but the Arctic weather made a difficult situation worse by keeping shoppers at home.

Like-for-like sales dropped 0.3% year-on-year – their first decline since April.

Sales of food and drink continued to grow as consumers found the money for a Christmas feast, but sales of most non-food categories dropped. Overall sales rose just 1.5% – the lowest rate of growth since April.

Stephen Robertson, director general of the British Retail Consortium, said “a combination of weather and worries” led shoppers to cut back on presents.

He added: “With mounting concerns about the impact of spending cuts and the wider economy, sales growth has been weak since last summer.

“December was always likely to be similarly unspectacular, but the snow and ice dealt an extra blow to business for many retailers.”

Online sales gained early in the month as housebound shoppers turned to the web.

But the increase in sales was more than outweighed later in the month when orders fell off as customers became worried about receiving deliveries in time for Christmas.

Non-store sales, which include orders made on the internet or telephone, were up 18% year-on-year. However, this marked a drastic slowdown on a year ago when they grew at 26.5%.

The snowy weather helped boost sales of soup, casseroles, tea, coffee and hot chocolate as well as traditional treats such as champagne.

Strong demand for snow boots and wellies helped increase sales of footwear, while clothing sales were flat despite selling more coats and cold weather gear.

But sales of furniture, homewares and DIY goods were all down as consumers kept a tight grasp on their purse-strings.

Electrical items also declined despite strong sales of iPads and tablet computers and some retailers reporting that consumers brought forward purchases to beat the increase in VAT from 17.5% to 20% on January 4.

The next year is set to be “challenging” for retailers, but Mr Robertson said the outlook was not as bad as in the depths of the recession.

He added: “This is no return to the dire picture two years ago, but the message for the Chancellor is: concentrate on delivering growth and leave any new burdens out of your March budget.”

 

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