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UK retailers expect sales to fall at the start of the year after broadly stabilizing in December, the latest monthly Distributive Trades Survey data from the Confederation of British Industry showed Monday.

The retail sales balance fell to -3 percent in December from -25 percent in November. However, a net 33 percent expects sales to fall in the year to January.

The survey which was in field between November 23 and December 14, covering the latter part of the second English lockdown and the return to tiered restrictions, revealed significant divergence across sub-sectors.

While grocers, furniture vendors and retailers of ‘other normal goods’ logged strong growth, clothing, footwear and department stores continued to report volumes were lower than a year earlier.

Ben Jones, principal economist at the CBI, said “It says something about the challenges the retail sector has faced during 2020 that stable sales volumes in the run-up to Christmas were seen as a good result for the time of year.”

“The new year looks set for an unpromising start, with retailers anticipating a sharp fall in sales in January,” Jones added. “An expected deterioration in the labour market will likely weigh on household spending, even assuming the roll-out of Covid-19 vaccines paves the way for a gradual lifting of restrictions as the year progresses.”


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