Fashion sales rose in JanuaryTuesday, 08 February 2011
British shoppers defied the VAT rise by spending more, a report on high street sales for January revealed. The street spending leaped by 9.1% with gains made in most categories, confirmed data compiled by BDO.
According to the British Retail Consortium (BRC), sales values were up 2.3 per cent on a like-for-like basis from January 2010, when sales had fallen by 0.7 per cent. These figures come out soon after the British Government raised the VAT from 17.5 per cent to 20 per cent on January 4th. Stephen Robertson, director-general at the BRC, commented in a note: "On the surface, this is the best sales growth since last March, but that's not the whole story.”
“Comparisons are with a feeble, snow-hit performance a year ago. Growth this January was driven by a relatively short but strong burst of non-food buying early in the month. Clearance discounts and a last chance to beat the VAT rise got people buying things like furniture and electrical in the first few days,” he added.
Compared to last year weather- caused turmoil, high street retailers posted strong results in January. One-off factors, such as the Monday New Year Bank Holiday, which did not occur last year also contributed to these results, pointed out from BDO. “There was also some evidence that shoppers brought forward purchases to beat the VAT increase”, highlights the ‘BDO High Street Sales Tracker’ for January 2011.
Nevertheless, researchers at BDO recall that January was to be observed in two differentiated halves, as “during the second half of the month demand ebbed away as stores reduced promotions. It appears that after spending heavily in the New Year Sales many shoppers currently have a low appetite for discretionary purchases. We can’t see this situation changing in the immediate short confidence.”
Image: High street shoppers