A
sharp decline in the petrol price improved disposable incomes and
this boosted the spending levels of consumers after the Christmas
sales.
The
survey indicated that half of the stores saw an increase, with only
around 10% reporting a decline. This boosted the index to +39%,
compared to an expectation of 35%.
The
highest increases were among food, furniture and clothing retailers,
whilst DIY and sports gear retailers saw a decline. Clothing reached
a 23-month high during this period. According to analysts, prices
were maintained due to strong competition among retailers and the
change in weather boosted sales of warmer clothing.
The
director of economics at CBI, Rain Newton-Smith, said the decline in
oil prices and lower inflation rates will result in consumers having
more expendable cash and this could boost sales growth.
The
only dark cloud on the horizon was that many retailers reduced orders
with their suppliers. Although the figure between the reduction and
increase of supplier orders was below expectations, the CBI is
expecting an increase over the next month.
The
high possibility that interest rates will not increase until 2016,
along with low inflation, should boost the purchasing power of
consumers during 2015.
