Seasonal Sales at 3 year Low
Christmas 2007’s high street sales figures were the worst since 2004, according to the British Retail Consortium.
The UK’s retail sales rose by just 0.3% when compared to December the year before (2006). On a like-for-like basis, Christmas 2006 saw sales up 2.5% so 2007’s figure shows significantly weak growth.
Director General of the BRC, Kevin Hawkins, admitted
"This result is somewhat worse than we expected and points to a very challenging first half for 2008."
He went on to mention that he believes
"the full effects of the Bank’s previous increases in interest rates have yet to be felt"
despite the fact that the last rise to 5.75% was in July last year and that there was an interest rate cut to 5.5% in December. He expects a rate cut in the next Bank of England’s Monetary Policy Comittee decision due on Thursday 10th January, prefering the rate to be cut by 0.5% to 5%.
According to Helen Dickinson, Head of Retail at KPMG, there was a variation in performance across the sectors of the retail industry. Clothing & footwear sales fell in December whilst food & drink and toiletries & cosmetics grew.
The mixed fortunes of UK retailers has yet to be fully realised as some stores have yet to release their seasonal sales figures.