E-commerce Provides Only Ray Of Light For UK Retailers In January

E-commerce has once again become a port in the storm for the battered UK retail ship, proving the only section of the retail market to register growth during the first half of January.

However, the latest CBI figures are unlikely to put the minds of anxious UK retailers at rest. Online and mail-order sales did give a solid performance but it was far from enough to make up for the calamitous decline in high street sales. Actually, the report could give rise to fresh worries, as the rate of growth for online sales fell significantly short of the results achieved in December, the CBI Distributive Trades Survey shows.

So what exactly does it show? During the two-week period covered by the survey, 44% of UK retailers suffered a drop in sales volumes compared to the same stretch in 2011. For 22% there was improvement, meaning a negative 22% on balance. The non-store category, which covers online and mail-order businesses, alleviated some of the high street pain with average sales growth exceeding 50%. However, this figure does not appear as impressive when set against the 91% recorded in December.

Despite remaining on a growth trajectory, online sales are unlikely to compensate for the general retail distress. The CBI found traders bracing for a further sales drop in February after the disappointing January results and the drop in orders. According to Ian McCafferty, chief economic adviser at the CBI, the post-festive period has seen Britons switch back to frugal mode, struggling to balance household budgets while grappling with high inflation and modest wage growth.