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Healthy start to 2011 for UK retail industry

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Promotional activity around last month’s VAT rise and the fact the new year bank holiday fell on a shopping day helped the retail industry get off to a “healthy start” in 2011, according to accountancy and business advisory firm BDO.

Figures from the group show that sales on the high street in January were up 9.1 per cent year-on-year, providing a new year boost to British mid-market retailers.

Fashion sales grew by ten per cent compared to the same month in 2010, while non-fashion trading was up 6.8 per cent thanks largely to strong performances from luxury retailers in London.

Homeware sales were also impressive, rising 10.5 per cent year-on-year, and BDO attributed this increase to consumers taking advantage of offers where the VAT hike was postponed.

Also the growth of online retail continued, with purchases made via the internet increasing by an impressive 49 per cent.

Don Williams, National Head of Retail and Wholesale at BDO, welcomed the results, which were aided by comparisons with the snow-affected January of 2010, but warned that the next few months could be particularly tricky for retailers.

“Now the new year buzz has worn off, retailers will be preparing for a tough first quarter,” he explained.

“With momentum starting to build behind new platforms such as mobile commerce, getting non-store offers right will be even more crucial this year.”

Williams’ comments echo those recently made by retail analyst at TLC Marketing Worldwide, Gemma Lovelock.

Following last month’s Confederation of British Industry Distributive Trades Survey, she said that it is difficult to read too much into robust trading in January because of seasonal sales and discounting.

Lovelock commented: “The fog caused by seasonal sales and discounting will clear in February and March and we will then get a far clearer picture of what is happening on the high street.”

Published on Monday 07 February by Editorial Assistant

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