CBI: Online, mail-order only bright spots in UK January retail growth

The latest CBI Distributive Trades survey shows retail sales in the UK had their biggest annual fall in three years as consumers reigned in spending following the holiday season. Results show online and mail order sales were the only bright spot.

by Helen Leggatt

cbi uk logo.gif The CBI's survey for the first two weeks in January reveal reported sales balances plummeted in January to -22% from +9% in December, far greater than the predicted drop to -6%. The dip was the lowest in three years at a time when the country was last in recession.

"Shoppers have reined-in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales," said CBI chief economic advisor Ian McCafferty. "Family budgets are under continuing pressure with inflation still high and wage increases modest."

But retailers in the non-store category - those offering Internet and mail-order sales - performed well reporting, on average, rises in sales of +50%, although this rise was still weaker than the +91% growth seen in December.

"Consumers are still holding off particularly from buying big ticket items like washing machines and fridges," said McCafferty. "Online and mail order sales were the only areas that performed well in January, but growth was still down on last month."