UK retail sales fall in January – and it's not just the snow
Unexpected drop proves there's less money available for discretionary spending on the high street
RETAIL sales in Britain fell by a shock 0.6 per cent last month, confounding analysts' predictions of 0.9 per cent rise, according to official figures released this morning.
The Office for National Statistics (ONS) said the drop could be attributed partially to heavy snow in the last part of January, but the BBC's business correspondent Jonty Bloom cautions against just blaming the weather – there's also been a general downturn in spending, he says.
"There was also a sharper than expected fall in spending in the run-up to Christmas," he writes. "Overall household spending has failed to increase over the last year."
George Buckley, chief UK economist at Deutsche Bank, says the ONS figures - which were down 0.6% on December and year-on-year - marked the second worst January sales period for the last 15 years. They come in the wake of several high street chains going into administration, including Jessops, HMV and, most recently, Republic.
ITV economics editor Richard Edgar takes a more optimistic line, saying: "Shoppers tend to postpone, rather than cancel altogether, their purchases when the weather turns foul - so we should see much of that spending appear this month [February]." He feels it would be an "exaggeration" to assume the figures are a sign that Britain is heading for a triple-dip recession.
Larry Elliot of The Guardian isn't so sure, pointing out the volume of retail sales in the three months to end January 2013 was 0.8% lower than in the previous quarter, a drop that will fuel fears of economic contraction. "Those trends cannot be explained away by a few inches of snow and a week of sub-zero temperatures," he says.
"The best explanation of all is the most obvious one: consumers are skint. Real incomes, according to the ONS, are back to 2003 levels, and with petrol prices again rising sharply there is simply less money available for discretionary spending". ·