Newspaper article The Journal (Newcastle, England)

Festive Season Spending Was Nothing to Celebrate; as Consumer Confidence Dips and the Economy Staggers It Is Hardly a Surprise That a Chill Descended over Christmas and New Year Trading. IAIN LAING Surveys the Highs and Lows of Retail over the Last Two Months

Newspaper article The Journal (Newcastle, England)

Festive Season Spending Was Nothing to Celebrate; as Consumer Confidence Dips and the Economy Staggers It Is Hardly a Surprise That a Chill Descended over Christmas and New Year Trading. IAIN LAING Surveys the Highs and Lows of Retail over the Last Two Months

Article excerpt

IT WAS never going to be the merriest of Christmases for retailers.

Britons had seen their disposable income fall for the last two years and even the most festive shoppers have learned to keep their high spirits on a tight leash when it comes to spending over four years of economic gloom.

A rise in sales in 2008 and 2009 had been cut short by the sweeping snow and ice in 2010 and last year's modest rise in December sales was widely interpreted as just the result of the weather allowing people to walk and drive in relative comfort.

There was only a 0.6% rise in sales volumes last month, which followed a 0.5% drop in November, which was driven by clothing chains and department stores, and came as store-price inflation, the rate at which prices rise, fell to its lowest level for 16 months, from 3.6% to 2.4%.

Early discounting had also helped bring shoppers back out but the rise in spending was nothing to celebrate and sales of big-ticket items, including furniture and TVs, continued to suffer in December. And the special offers only helped to hit struggling retailers' profit margins.

There was a rise in the number of shoppers coming back into some town and city centres with Newcastle seeing a 14% rise in the first week of January and 18% in the second week, mainly driven by extra evening trading.

The business improvement district operator NE1's Alive After Five campaign, which brought in late opening and free evening parking was deemed a success.

NE1 chief executive Sean Bullick said: "Times may be challenging for retailers but Newcastle continues to hold its own.

"Footfall figures for the first two weeks of January were up by nearly 14% on the previous year and the city continues to perform well against the national average."

But he added: "We are definitely seeing more people come into the city but how much more they are spending when they get there, we just don't know." British Retail Consortium director-general Stephen Robertson said: "The continuing high levels of pre-Christmas discounting and promotions are another symptom of weak demand.

"Retailers know they need to fight hard for every pound that's out there in the hope of attracting business which would otherwise go to their rivals. …

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