Sharp fall in retail sales for January

According to recently released figures January saw a sharp fall in the level of retail sales, with sales levels falling at their sharpest level in a year and a half.

Household goods are said to have been particularly hard hit by the drop in retail sales. Figures were released by the Office for National Statistics, and showed that the fall was the sharpest month on month fall since June 2008, with sales levels dropping by 1.8 percent.

Sales levels for December have also been revised, and whilst they were originally recorded as 0.3 percent growth they have now been revised down to a 0.2 percent fall. For the first time petrol sales were also included in the figures, which contributed to the drop according to reports.

The poor sales levels were partly down to the cold snap that was seen through January, with many shoppers deciding to stay at home rather than hit the shops in the cold weather, which also impacted upon petrol sales.

There are now fears that whilst the UK finally came out of recession, with growth of just 0.1 percent, the poor sales figures could heighten the risk of a double dip recession, where the country is plunged back into recession having only just managed to escape it by the skin of its teeth.

Household goods took a real bashing in terms of sales for January, with a drop of 13.4 percent being recorded. Petrol sales levels were down by 11 percent, and food sales were down by around 2.4 percent.

One economist commented on the figures, stating: ‘Sales in aggregate should rebound in February, but given household debts remain high, incomes are under downward pressure and taxes are rising, consumer cash flows are likely to be restricted in 2010. This points to very modest retail sales growth through most of this year.’

Tags: double dip recession, cash flows, Office for National Statistics, food sales, recessions