Retail sales figures to reveal impact of snow
21 January 2011 09:40
The Office for National Statistics (ONS) is expected to reveal a 0.3% drop in sales volumes in its Retail Sales Index for December as shoppers stayed at home to avoid the Arctic conditions.
The full impact of the freezing temperatures and heavy snowfall has been unclear so far as a flurry of retailers have offered mixed trading reports for the crucial period running up to Christmas.
Economists said this led to a wide range of forecasts for the month, from a 2% decline in volumes to a 0.5% rise.
High street giant Marks & Spencer and department store favourite John Lewis reported strong sales growth, while fashion chain Next and entertainment group HMV blamed the severe weather for a slump in sales.
The ONS data - which covers the period up to January 1st and includes the discount-heavy week after Christmas - will reveal the impact on both sales values and volumes.
Philip Shaw, chief economist at brokers Investec, said the "catch-up" sales in the week to January 1st were unlikely to be enough to overcome a negative month overall.
He said: "Snow may be exactly what is needed to get shoppers into the Christmas spirit. But the prolonged snow and coldest December in 100 years which severely affected transport over the crucial Christmas shopping period is likely to have been bad for December's official UK retail figures."
Mr Shaw said Investec expects the ONS data to show a month-on-month decline of 1.5% in sales volumes in December, compared to a 0.3% rise in November.
He added the non-food sales are likely to have been hit the hardest.
Earlier this month, the British Retail Consortium released its own sales monitor statistics, which showed a 0.3% year-on-year drop in the value of sales.
The figures represented the worst retail sales performance for eight months as the disruption caused by the snowy weather combined with consumers' cashflow concerns.
HMV was one of the first retailers to come forward and reveal dismal sales figures for the festive season. The company, which also owns bookseller Waterstone's, reported a 13.6% slump in HMV's like-for-like sales in UK and Ireland in the five weeks to January 1st.
Fashion chain Next said the snow cost it £22 million in lost sales as customers stayed at home during the Christmas period.
But elsewhere department store chain House of Fraser announced record seasonal trading despite the impact the weather had on Christmas sales. The group said sales for the five weeks to January 8th were up 8.5% on a like-for-like basis.
Marks & Spencer said that it had overcome the big freeze and recorded its biggest ever day in food sales on December 23rd - of £50 million. The retailer said big impact promotions saw UK like-for-like sales in the 13 weeks to January 1st grow at a better-than-expected 2.8%.
In the supermarket industry, Sainsbury's led the way, with 3.6% like-for-like sales growth in the 14 weeks to January 8th, while UK number one Tesco disappointed with 0.6% same-store sales growth.
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