Retail sales pick up in December

Retail sales picked up in December, according to the Office of National Statistics, but are likely to be followed by months of slow trading.

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The value of retail sales increased 6.2% over December 2010 and 0.8% on November. Volume sales increased 2.6% year-on-year in December and 0.6% month on month.

Performance was driven by clothing and footwear retailers, which saw a sales increase of 6.3%, while household goods sales were down 3.6% as shoppers continued to hold back on big ticket items.

The figures come amid a mixed bag of Christmas trading results from retailers, with some such as John Lewis and Sainsbury’s reporting strong trading, while others such as Dixons fared less well.

Spending in December reached £42.1bn in total spend for the year reached £343.2bn, up from £326.2 billion in 2010.

The British Retail Consortium (BRC) says the boost to sales at the end of the year came at the expense of margins as retailers slashed prices to attract shoppers and will be followed by a number of slow months as shoppers take stock of their finances.

The body also warns that the comparisons are against weak performance in 2010 when the high street faced snow and harsh weather.

BRC public affairs director Jane Bevis adds: “Underlying factors including low consumer confidence and falls in real disposable income mean shoppers remain reluctant to spend and are only encouraged by significant discounting.”

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