While many high street retailers planned for a surge in sales around Christmas and a further increase in revenue during the January sales, a recent report conducted by the BRC showed that retail revenue fell by 0.7% in January – the worst in fifteen years.
According to the report, this was a consequence of the horrendous weather conditions that hit the UK in January, compounded by the increased of the VAT rate back to 17.5%.
However, it wasn’t bad news for the entire retail sector. Indeed 2010 started with a bang for most supermarkets as people tried to stock up for essential items and it was an entirely different story for online retailers, who saw their sales soar in January.
Matthew Alexander, economic advisor to the BRC, comments: ‘ While retail figures in December weren’t as bad as many retailers fear, January figures seem to indicate that consumer confidence is still low despite the government announcing that the UK is out of the recession. However, the snow and VAT rise undoubtedly had an impact on consumer behaviour and we think that February will be much more illuminating.