UK Shoppers Spending More

UK shoppers were in spending mode throughout January, pushing official sales figures ahead of forecasts, and increasing the likelihood of a further quick rise in interest rates to help calm demand. Figures from the Office for National Statistics show total retail sales grew by 1.7 per cent in the three months to the end of January 2004, compared with the previous three months.

Across the three months sales increased by 2.5 per cent in non-food stores and by 0.6 per cent for food retailers. The total retail sales volume for the three months to January was 4.5 per cent higher than a year ago, with the strongest increase in the clothing and footwear sector, at 7.6 per cent.

Monthly figures for January show a 0.6 per cent increase on December and a 6.4 per cent increase on January 2003. Kevin O'Sullivan, director, retail & wholesale sectors at Barclays said: "2004 has got off to a flying start as high levels of consumer spending over the Christmas period spilled over into January. The good news for retailers is that the growth in sales does not seem to have been at the expense of margins with many retailers holding their nerve on discounts through the new year.

"Sales naturally dipped towards the end of January as shoppers went back to work. The key test now for retailers is whether consumer confidence will remain strong in a period of rising interest rates and when spring and summer collections need to be sold."