Retail Confusion

I'm confused. The sharp-eyed amongst you will notice I blogged on the CEBR's report that the Government's decision to reduce VAT in December had produced some £2.1bn extra sales in the first quarter of 2009. They argued that the annual growth in retail sales was higher than expected and this was due to the reduction in VAT of 2.5% which they called to be extended a further 6 months.

Now we have the report out from the British Retail Consortium (BRC) which says completely the opposite. They say that like-for-like sales, which does not include sales in new shops, fell 1.2% in March this year, the ninth fall in sales in the last 10 months.

They also point out that there was a small increase year-on-year in January but this was due to very heavy discounting by retailers. Expensive goods came top of the list of hard hit with furniture sales falling to their lowest level in 9 years. This despite being sent a £400 voucher to use in the 50% off sale at DFS with 4 years free credit, I can tell you from personal experience - even with such an incentive and two dogs who have ruined our suite, we couldn't find anything that a) we liked and b) had sufficient quality (that plus the sales staff either were too busy sitting in the centre of the store talking or sinisterly stalking us and pretending to move signs as we made our way around).

Meaningful information was limited by the fact we had a very cold March and the data does not include Easter sales which are usually very high.

A partner from KPMG pointed out that there was cause for some Spring optimism as there was a small increase in the number of women's shoes bought and clothing. However, the barometer must be not working in his office as I can assure him that my wife bought only two pairs of shoes since Christmas despite the incredible sales, and the two pairs she did buy were bought in Milan.

As many will know, this is drastically down year-on-year in like-for-like purchasing and the en-suite bathroom converted to shoe storage has now some free space due to an annual clear out. Purchases of handbags in the same period have also suffered dramatically and, to my knowledge, purchases in the first quarter were their lowest in 12 years.

Let's hope this recession lasts a bit longer yet. I might even get to take a shower.