Even Retailers Spin The News

(Guardian) – BRITAIN’S RETAILERS saw the weakest Christmas for more than two years, according to official figures, with shoppers staying away amid concern about their jobs and financial security.

Retailers also hiked their prices in December at the fastest rate since the early spring. Increased prices came after six months of declines in which retailers tried desperately to get consumers spending again in the depths of the recession.

Sales growth of just 0.3% in December, according to the Office for National Statistics, was far less than the 1.1% rise which analysts had been expecting and the weakest for the month of December since 2007.

Year on year, it was the weakest December for more than a decade, with sales volumes up just 2.1%. That is the lowest annual growth for a December since 1998.

But the rise in prices forced through by retailers meant that in terms of value, retail sales rose 3.6% in December year-on-year – the second highest for the month since 2001.

The figures come as a shock as most of the recent clutch of trading updates from retailers have been good. Instead they have been warning that trading will be tough in 2010 as consumers suffer frozen pay and increased taxes – including the ending of the VAT reduction.

Just yesterday, supermarket chain Morrisons announced it trumped its bigger rivals over Christmas, recording better sales growth than Tesco, Sainsbury’s and Asda.

The ONS said sales volumes at department stores fell 1% on the month, but non-store sales, which include mail order, rose by 2.8%. The department stores figure is a surprise as earlier this month House of Fraser revealed record seasonal trading while John Lewis had a record Christmas.

Debenhams, however, reported flat like-for-like sales for the 18 weeks to 2 January.

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