Money

Third month of flat retail sales as DIY and furniture slump


Retailers were denied a post-election bounce in January following a slump in DIY and furniture sales, according to industry data.

The CBI’s monthly distributive trends survey showed that a rise in purchases at department stores failed to offset the effects of weak demand across the high street, translating into flat sales for the third month in a row.

The survey data, which follows poor official sales figures for December, also found that orders placed with suppliers fell as retailers maintained high levels of stock.

Stagnating retail sales will add to the uncertainties in the wider economy, ahead of Mark Carney’s final meeting of the rate-setting monetary policy committee as governor of the Bank of England on Thursday.

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The CBI said sales were “poor for the time of year”, and that responses from retailers showed weak consumer demand would continue into February.

Anna Leach, deputy chief economist at the CBI, said: “Both official data and business surveys are painting a picture of subdued activity for retailers.

“A challenging Christmas has extended into the new year, with little expectation of any improvement soon.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, was more optimistic, arguing that a deeper look at the CBI’s figures showed annual growth of about 2.5%.

“We continue to expect quarter-on-quarter growth in households’ real spending to average a solid 0.4% in the first half of 2020, buoyed by low inflation, steady job growth, a tax cut in April in the form of an increase in the threshold for national insurance contributions, and a reviving housing market,” he said.

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