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News - 17 February 2008

January sales up but discount driven

UK sales rose 2.6% in January compared with last year and the month on month trend is also up but sales were very much discount driven.

January sales accounted for much of the spending and although takings were up profits would not be as high as in the previous months leading up to Christmas.

Consumer confidence is low and falling. This means people will become increasingly price conscious. They will spend to take advantage of a bargain but are less likely to maintain their enthusiasm for shopping when prices return to normal levels. It is also likely that retailers will begin to pass on inflation increases to the consumer. This is beginning to happen in the food sector.

The momentum of the last few months is predicted to fall and experts are concerned about the prospects of some of the higher end retail sectors.

There is an upward trend in electrical and DIY goods as well as food but fashion is struglling. This might be a sign that people are focusing on saving money by doing their own DIY and eating at home more than going out. But fashion continues to be a luxury that not everyone can afford and is likely to take the brunt of the pending downturn.

For a fuller report on the current retail trends from the British Retail Consortium click on the link.

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