The Confederation of British Industry (CBI) today offered the most pessimistic retail forecast in its history, predicting that February sales would hit -55 on its index.
The figure would put February second only to December 2008 as the worst month on record. Ian McCafferty, chief economic adviser to the CBI, told the Independent, "it is possible pre-Christmas discounting...numbed many shoppers to the allure of new year sales."
While December sales may have seen retailers shoot themselves in the foot, there are certainly other reasons for the contraction. Big purchases funded on credit are no longer being made, as the credit is not available. Furthermore, many shoppers are downgrading their purchases, choosing to buy cheaper versions of the same items. Job security seems to be the over-riding concern.
The Office for National Statistics released its own figures last week, which take greater account of online retailers and present a rather more hopeful figure. The ONS figures suggest that sales are actually up 2.4 per cent on last year. However, the Office has frequently been forced to downgrade its forecasts during downturns, and it is expected to do so again.
