Essential reading for retailers and suppliers in the home improvement market

December fails to deliver retailers' hopes of Christmas sales

Published: 20 December 2012
According to the latest CBI report, more retailers saw a sales increase during the first two weeks of December than those who did not, but the number was far below retailers' expectations for the festive buying period.
December fails to deliver retailers' hopes of Christmas sales
While 36% reported an increase in volume of sales compared with a year ago, and 17% a decrease, the resulting balance of 19% lagged behind the increases seen in November (30%) and October (33%), and did not meet retailers expectations of 25%. As a result, said the CBI, retailers considered sales volumes to be below average for the time of year (-18%).

It's not all bad news, however, for certain homewares retailers. In the furniture and carpets category, 42% more retailers saw an increase than those reporting a decrease - however this was a slower rate than in November.

Those selling big-ticket 'durable household goods' saw one of the biggest negative balances, with 58% more reporting a decrease in sales volume compared with last year.

The picture for early 2013 isn't looking too cheery either; the CBI predict sales growth to "continue losing steam next month" and retailers are expecting a slower rise once again in the year to January (10%) . Orders placed on suppliers - up this month at 13% - are expected to flatten next month.

CBI's head of economic analysis Anna Leach said: "This month's survey hasn't quite provided the Christmas cheer that retailers anticipated, with sales growth falling short of expectations.

"Clearly, weak spending power and uncertainty over the economic outlook are likely to remain key risks to the retail sector in 2013."

CBI distributive trades panel chair and Asda chief operating officer Judith McKenna said: "This latest data covers the period to the middle of December and we should take heart that sales on the high street have held up during the early crucial Christmas shopping period. However, on-going economic fragility is maintaining the squeeze on household incomes, and it's notable that sales are below par for the festive season.

"So while families are making their budget stretch as far as possible for the Christmas season, the Christmas spending spirit can only go so far. In reality, sales growth has actually slowed since the Autumn and retailers are expecting a further slowdown in the New Year."

· Are you seeing a decline in sales this Christmas? Take our DIYWeek.net poll and let us know!

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