High street sales suffer biggest drop since May
RETAIL sales have suffered their biggest drop since May as the latest round of coronavirus restrictions squeezes the high street.
The Confederation of British Industry said that while grocery and furniture sales were flat, there were marked declines in categories such as clothing and recreational goods.
The CBI, which asked retailers to compare sales with a year earlier, said that retail sales in January fell 50 per cent, compared with a fall of three per cent for December.
They are expected to fall again next month to 47 per cent.
Calling for continued state aid, CBI economist Ben Jones said: “The data brings home the ongoing challenges of lockdown for the retail sector, as sales volumes weaken again.
“With the lockdown likely to remain in place in the near term, retailers expect this weakness to continue. It is therefore vital that Government support continues in parallel to restrictions.” He added retailers need more taxpayer help to survive the crisis, such as an extension of the business rates holiday.
Online sales are doing extremely well in general, it was said, but this is more than offset by just how badly shops are doing.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Conditions likely will not improve materially for retailers until mid-March, when we think the Government will permit non-essential shops to reopen.
“And the shortfall in sales until then will be too big for many retailers to endure.”
With retail being one of the driving forces of the economy, the EY ITEM Club think tank said that it expects the economy to “experience a clear contraction” this quarter of three to four per cent.
If that occurs, Britain is likely to face a double-dip recession.