High street sales growth slowed sharply at the beginning of January amid a post-Christmas cut-back in spending and slump in demand for warm clothes in unseasonably mild weather, according to new figures.
The latest distributive trades survey from the CBI revealed the worst reading from clothing retailers for nearly five years in a reversal of buoyant conditions in the run-up to Christmas.
A poll of 113 firms between 2 and 15 January revealed that 33 per cent of retailers overall said sales rose in the year to January and 19 per cent reported a fall, giving a balance of 14 per cent.
This is far lower than the 34 per cent reading for December, but the CBI said it was still an “encouraging” result.
Barry Williams, chairman of the CBI survey panel and chief merchandising officer for food at Asda, said: “At a time of year when shoppers are recovering from the excesses of Christmas and watching their spending, it’s encouraging that high street sales have continued to grow.”
Retailers expect sales to grow modestly again next month, with a balance of 15 per cent pencilling in a rise as the sector continues to recover from difficult conditions in October and November.
There are some fears over the impact of muted wage growth as salary rises continue to be outstripped by inflation.