Retail Sales Fall 1.8 Per Cent

[interestrateripoff]

http://www.independent.co.uk/news/business/news/retail-sales-fall-18-per-cent-1904467.html

Retail sales slumped in January as heavy snow blitzed the high street, official figures showed today.

Sales volumes fell by a bigger than expected 1.8 per cent compared to the previous month, according to the Office for National Statistics (ONS).

The figures were also weighed down by the inclusion of petrol in the official figures for the first time as drivers stayed at home in the poor weather.

The 1.8 per cent fall is the biggest month-on-month decline since the early stages of the slump in June 2008, while December's sales were also revised down to a 0.2 per cent fall instead of the 0.3 per cent growth initially registered.

The disappointing figures increase the risk of a slide back into recession in the opening three months of this year after the UK crawled to 0.1 per cent growth in the final quarter of 2009.

The figures revealed a 13.4 per cent slump in sales volumes for household goods stores in January, while food retailers registered a 2.4 per cent decline. Petrol sales volumes were down 11 per cent, more than offsetting gains for clothing and department stores.

Stripping out petrol, overall sales volumes fell 1.2 per cent in January, which is the biggest month on month drop since February last year.

IHS Global Insight economist Howard Archer said the the weak data reinforced concerns over a "double-dip" recession as retailers were hit by a "perfect storm".

As well as the bleak winter weather, VAT has been hiked back to 17.5 per cent and firms have controlled stock more tightly to protect profit margins.

ING Bank economist James Knightley said: "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.

No shock for most on here that snow got the blame for the poor figures, only in the UK does snow fall and the economy collapse.

What's more interesting in this is that the Dec figures have been revised DOWNWARDS it would appear that the 0.1% growth registered at the end of Q4 is under real threat of becoming a negative figure meaning the UK still has not exited from recession! That's after the BoE printing £200bn of free funny money!

It would appear that 2010 is going to get very interesting especially as govt tax revenue is clearly collapsing, GDP figures are clearly masking severe structural weakness.

Edit for spelling

Edited February 19, 2010 by interestrateripoff

[bengy1664]

"Things can only get better"

[council dweller]

Surely the revision of December's retail sales coupled with the larger than expected trade deficit (Nov?) will have wiped out the 0.1% 4th quarter growth?

[DoctorJ]

Call an election! before the wheels come off completely!

[scottbeard]

The only way the UK will avoid a double dip recession is if the 2009 Q4 is revised downwards confirming we are still in the first dip.

[TheCountOfNowhere]

The snow had very little impact on my spending habits.

If anything I spent more, to keep warm, stocking up, petrol, onine shopping.

Maybe it's the fact everyone is skint, worried about their jobs and sitting in houses they cant afford !!!!

Edited February 19, 2010 by TheCountOfNowhere

[Sour Mash]

The only way the UK will avoid a double dip recession is if the 2009 Q4 is revised downwards confirming we are still in the first dip.

It's all part of a cunning plan then. No more boom and bust and no double-dip recession in Britain!

Anyone know when the revisions to Q4 GDP are due to come out? I'd agree that everything points to a downward revision and likely a negative figure.

[Gone baby gone]

while December's sales were also revised down to a 0.2 per cent fall instead of the 0.3 per cent growth initially registered.

Ahhh... the joy of revising down.

I wonder how long before that positive GDP is "revised down".

[stuckmojo]

Ahhh... the joy of revising down.

I wonder how long before that positive GDP is "revised down".

That will basically screw Gordon's strategy.

Even if they called an election now, the cat's already out of the bag.

Still, he can count on the public workers, scotland, wales, the north-east and the dole army.

He can still win.

[deflation]

I know it may have been just a backlash of sorts, but don't forget that in Wales Labour (20.3%) finished BEHIND the Tories (21.2%) in the European elections in June 2009.

And what is this perception that public workers all vote Labour? A higher proportion than other sectors maybe, but I know a few and they are pretty right wing in their views and are more likely to vote BNP or UKIP than Labour.

Admittedly, I don't know any teachers.

Edited February 19, 2010 by deflation

[Lepista]

It doesn't surprise me that Brown can't even properly engineer a double dip recession.

[MinceBalls]

http://www.independent.co.uk/news/business/news/retail-sales-fall-18-per-cent-1904467.html

No shock for most on here that snow got the blame for the poor figures, only in the UK does snow fall and the economy collapse.

What's more interesting in this is that the Dec figures have been revised DOWNWARDS it would appear that the 0.1% growth registered at the end of Q4 is under real thread of becoming a negative figure meaning the UK still has not exited from recession! That's after the BoE printing £200bn of free funny money!

It would appear that 2010 is going to get very interesting especially as govt tax revenue is clearly collapsing, GDP figures are clearly masking severe structural weakness.

Quite.

Interestingly did you also see the report (Guardian I think) that uncovered the fact that the magical, record breaking pre-Christmas sales at Tesco and ASDA were actually down to PRICE INCREASES, Apparently they were changing prices so much on their goods in order to confuse customers. Clever. Or Tossers. I'd go for the latter.

How long can this sort of exploitation continue in the name of 'growth' and the 'mutherf*ckingrecovery'?

Systematic, cynical, aggressive': expert verdict on Tesco and Asda prices

Supermarket giants Tesco and Asda dramatically increased prices on key items in the runup to Christmas in what an independent expert has called "a systematic, cynical and aggressive attempt to exploit demand", a Guardian investigation can reveal. Batteries, lightbulbs, medicines, Christmas drinks and must-have children's toys were among essentials whose prices were increased.

Both companies ran marketing campaigns before Christmas and at New Year boasting of thousands of price cuts but many consumers will have been unaware that they were also raising thousands of prices in the same period.

Data acquired from third party analysts and published on our website shows that between 9 and 22 December 2009, Asda increased prices on more than 2,000 lines while Tesco upped the price of over 1,500 lines. Professor John Bridgeman, the former director general of the Office of Fair Trading who conducted official inquiries into the supermarket sector, said that in his view the data showed "a cynical attempt to exploit demand in the week before Christmas and force prices up" and "extract maximum profit" from shoppers who were too busy to go elsewhere.

In Asda products that doubled or nearly doubled in price immediately before Christmas included a four-pack of Duracell Plus AA batteries, certain razor blades, gravy pouches, Lemsip, toothbrushes and pickles; Walkers Sensations crisps went up 45%, a 1.25-litre family bottle of Coca Cola went up 37%. In Tesco Nurofen was up 33%, a pack of Warburton's teacakes up 34.4%, a bottle of Beefeater gin was up 37.6% and various lightbulbs were up over 20%, for example. The must-have toy for girls, the Peppa Pig playset, went up 50% from £19.97 to £29.97 on 19 December.

The two retailers did not challenge the accuracy of the figures we put to them, but rejected Bridgeman's interpretation. They said the majority of the increases we have identified were on products that were coming off promotion. Bridgeman described ending advertised promotional discounts in the busiest week of the year as "cynical". Consumers did not expect promotions to end the week before Christmas, he said, and the rises would exploit the less well-off most as they have to manage budgets very carefully and shop week by week.

"There was no warning that the week or two before Christmas the retailers would aggressively raise certain prices. It's a cynical abuse of the busy shopper," he said.

The prices in our tables were taken from the grocers' online stores, which they say reflect the national pricing policies in their shops. The number of price rises in the period we analysed appeared high, affecting around 6% of lines in Tesco and about 9% of those in Asda. Bridgeman, who is now an international consumer consultant on supermarkets, said the constant churn in prices both up and down had made it virtually impossible for consumers to shop on price and most people had given up.

Both supermarkets, according to Bridgeman, would be able to use their sales data or information from loyalty cards to identify those purchases customers feel they have to make at Christmas and then target these categories for some steep rises "to extract maximum profit" from shoppers who have neither the time nor capacity to go elsewhere. So household cleaning goods, shaving products, toiletries, lightbulbs, batteries, pickles, sauces, herbs and spices typically consumed at Christmas, favourite seasonal drinks, hangover and indigestion pills, and must-have family presents were all categories seeing dramatic hikes on some lines.

Asda said: "The vast majority of products [that went up] were four-week promotions that simply reverted back to their original low price. Our customers know they don't just have to take our word for it. All of our prices are online and independently verified by MySupermarket.com, which proves that Asda had more low prices every single week in 2009 compared to any other supermarket."

Tesco said: "The suggestion that we had a policy of forcing prices up for customers in the runup to Christmas is totally wrong. The Guardian has used a skewed and unrepresentative sample of products to make a series of partial and misleading accusations which misrepresent Tesco and the highly competitive market in which we operate."

It also said it did not use data from its Clubcard in the manner suggested by Bridgeman. "In fact we cut the prices of hundreds of our most popular Christmas lines." Tesco said the price rises we had identified changed "as promotions ended, as supplier costs increased, or changed in line with the market". In the runup to Christmas it says it cut the price of 2,638 products and as some promotions ended, others not identified in our data began. Its promotions are advertised using various methods, including shelf-edge labelling and the dates on which promotions end are included, it told us.

Bridgeman estimated that the price rises in Tesco "had probably added around £15 per £100 spent to baskets for many households" but said that there was currently no useful week-by-week comparison available on a representative £100 basket of both food and non-food goods bought in the major UK supermarkets.

The Guardian investigation was an important contribution to understanding supermarket price volatility which was of vital interest to Britain's consumers, he said. Tesco did not respond specifically to Bridgeman's figure of £15 per £100 spent this year, but said it was misleading. "The average Tesco basket spend was lower in every week in the runup to Christmas this year than last year. In December our overall food inflation was 0.14%. This compares to 0.74% in November and a six-month average of 0.12%."

Edited February 19, 2010 by MinceBalls

[Ash4781]

That Dec revision is interesting. Could this be due to the inflation rate ? (being under-estimated)

Edited February 19, 2010 by Ash4781

[interestrateripoff]

Quite.

Interestingly did you also see the report (Guardian I think) that uncovered the fact that the magical, record breaking pre-Christmas sales at Tesco and ASDA were actually down to PRICE INCREASES, Apparently they were changing prices so much on their goods in order to confuse customers. Clever. Or Tossers. I'd go for the latter.

How long can this sort of exploitation continue in the name of 'growth' and the 'mutherf*ckingrecovery'?

No I haven't seen that. Is confusing customers good for business in the long run? I wonder which business school that idea came from?

[MinceBalls]

No I haven't seen that. Is confusing customers good for business in the long run? I wonder which business school that idea came from?

I know, the UK has actually lost the plot! You just couldn't make this stuff up.

But at least it meant GB could claim we are out of recession.

[feed]

I wonder which business school that idea came from?

That would be the, sell to customers that believe a 3p increase in the price of beans is the hyperinflationary holocaust and not just profit taking, school

[Gone baby gone]

I know, the UK has actually lost the plot! You just couldn't make this stuff up.

Supermarkets have been deploying various psychological ploys 'against' their customers since the 1970s. Loss leaders, constantly changing store layouts, deployment of certain smells, sounds and colours to influence buying decisions, changing pack sizes, multi buy offers that are the same price or actually more expensive than buying items individually, the list goes on and on. This is just part of their business.

[Oliver Sutton]

Incredible how snow can affect sales retrospectiverly as well.

We truly live in amazing times.

P.S. I think this makes an April election much more likely.

Gormless Clown will want to cut and run before the next GDP figues come out.

He may still have enough chavs, teachers, and mentally sub-normals to give him a win.

Edited February 19, 2010 by barry

[fluffy666]

Maybe it's the fact everyone is skint, worried about their jobs and sitting in houses they cant afford !!!!

That be treason-speak round these parts..

[Bloo Loo]

Incredible how snow can affect sales retrospectiverly as well.

We truly live in amazing times.

P.S. I think this makes an April election much more likely.

Gormless Clown will want to cut and run before the next GDP figues come out.

He may still have enough chavs, teachers, and mentally sub-normals to give him a win.

so expect bumper results in February as people buy the things they put off in January...or not.

[bearwithasorehead]

Quite.

Interestingly did you also see the report (Guardian I think) that uncovered the fact that the magical, record breaking pre-Christmas sales at Tesco and ASDA were actually down to PRICE INCREASES, Apparently they were changing prices so much on their goods in order to confuse customers. Clever. Or Tossers. I'd go for the latter.

How long can this sort of exploitation continue in the name of 'growth' and the 'mutherf*ckingrecovery'?

Anecdotal: seemed to me post Crimble that by local Morrisons had LOADS of marked-down stuff it couldn't sell - may be people are wise to their little ploys.

[deflation]

My local Asda is selling fresh chickens at £2 each today (the Brian Trusler ones).

I bought 3, but decided to vary my diet a bit with their reductions on Goodfella's pizzas. 4 for £3.

The poster who predicted a rollback after a price rise was spot on. Several products I use went up 30% or more in Jan and have now been 'rolled back' to a price about 5% above the Dec price.

[interestrateripoff]

I know, the UK has actually lost the plot! You just couldn't make this stuff up.

But at least it meant GB could claim we are out of recession.

Out of technical recession

[MrPin]

Weather gets the blame for lots of stuff!

If we bought 98.2% of the stuff we did last year, I don't see that's a major problem!

[Bloo Loo]

Doomberg...another classic.

Everyone knew it was coming, just didnt know when.