The Office for National Statistics announced last week that December retail sales were down 0.8%, the high street’s weakest performance since records began in 1998.
This may not have come as much of a surprise to analysts due to the economic environment of the previous years, along with the bad weather making for some very challenging conditions. Performance of top brands such as HMV, Dixons, Next, Mothercare and Argos were clearly effected with some announcing profit warnings.
According to the ONS, shops selling ‘mainly food items’ were down by 3.4%, petrol stations saw a 10.7% fall in sales and only the sale of winter clothing had some positive impact with sales up 5%. With the jump in VAT now in force, conditions may continue to be challenging going into 2011, although some analysts are predicting strong performance in the January sales.