UK: Clothing retail sales growth continues to be strong
Despite the threat of snow disrupting Christmas sales, UK retailers saw strong year-on-year growth in the first half of December – with clothing among the best performers according to the Confederation of British Industry (CBI).
That said, its latest Distributive Trades Survey expects growth to slacken slightly in January when VAT is set to rise.
The survey showed that for December, 67% of retailers said that sales were higher than a year ago, while just 11% said they were lower, giving a balance of +56%, the highest figure since April 2002. This means there have now been six months of strong sales figures in a row since July.
But retailers expect slower growth next month, with a balance of +35% expecting volume of sales to be higher than a year ago.
“Sales on the high street continued to rise strongly compared with a year ago, reflecting a stronger crucial pre-Christmas trading period,” said Ian McCafferty, CBI chief economic adviser.
“However, December’s strong survey balance is also likely to capture spending being brought forward, ahead of the January increase in VAT. Indeed, retailers expect sales growth to lose some momentum in the New Year.
“We remain cautious about prospects for the retail sector further ahead, given ongoing uncertainty over the resilience of consumer spending.”
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