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21 January 2011
Last updated at 05:20 ET
Bad weather and rising prices hit retailers in December.
The volume of retail sales was unchanged from the previous year, the Office for National Statistics said.
It is the first time there has been no growth in retail sales volume in a December since 1991. But the value of retail sales rose 2%.
Falling sales of food and fuel were responsible for the flat figures, with rising sales of winter clothing failing to make up for them.
The Met Office has confirmed that December was the coldest month since records began 100 years ago.
The volume of sales in shops selling predominantly food was down 3.4% from December 2009, which was the worst performance since records began in 1988.
'Hugely disappointing' There was also a 10.7% fall in the volume of sales at petrol stations, suggesting that people were leaving their cars at home as a result of the snowy conditions.
"These are hugely disappointing figures," said Hetal Mehta, UK economist at Daiwa Capital Markets.
"Of course some fall in retail sales was to be expected given the disruption caused by the snow, but the extent of the fall suggests there is more to it than just poor weather deterring consumers."
The fact that volume sales were unchanged while value sales rose, suggests that the 3.7% CPI inflation in December was also deterring shoppers.
December's figures also show the last month before the raising of VAT from 17.5% to 20%.
"Household goods sales fell by almost 1%, suggesting that the snow stopped consumers bringing forward spending on big-ticket items before the VAT rise," said Vicky Redwood at Capital Economics.
"We would not get too gloomy about any of this," she added. "Anecdotal evidence suggests that consumers flocked to the post-Christmas sales, meaning that spending should rebound in January."
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The volume of retail sales was unchanged from the previous year, the Office for National Statistics said.
It is the first time there has been no growth in retail sales volume in a December since 1991. But the value of retail sales rose 2%.
Falling sales of food and fuel were responsible for the flat figures, with rising sales of winter clothing failing to make up for them.
The Met Office has confirmed that December was the coldest month since records began 100 years ago.
The volume of sales in shops selling predominantly food was down 3.4% from December 2009, which was the worst performance since records began in 1988.
'Hugely disappointing' There was also a 10.7% fall in the volume of sales at petrol stations, suggesting that people were leaving their cars at home as a result of the snowy conditions.
"These are hugely disappointing figures," said Hetal Mehta, UK economist at Daiwa Capital Markets.
"Of course some fall in retail sales was to be expected given the disruption caused by the snow, but the extent of the fall suggests there is more to it than just poor weather deterring consumers."
The fact that volume sales were unchanged while value sales rose, suggests that the 3.7% CPI inflation in December was also deterring shoppers.
December's figures also show the last month before the raising of VAT from 17.5% to 20%.
"Household goods sales fell by almost 1%, suggesting that the snow stopped consumers bringing forward spending on big-ticket items before the VAT rise," said Vicky Redwood at Capital Economics.
"We would not get too gloomy about any of this," she added. "Anecdotal evidence suggests that consumers flocked to the post-Christmas sales, meaning that spending should rebound in January."
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Legal Forum | Politics Forum | Sports Forum | Teen Forum | Webmaster Forum