UK retail sales increase in January

There was an unexpected rise in UK retail sales in January as shops have been able to attract consumers with heavy discounting, which has been able to offset the effects of a faltering economy and job security, which has caused consumer confidence to plummet.

After a 1.7 percent rise in December, sales have again climbed again by 0.7 percent according to the Office for National Statistics.

Thus far sales have increased by 3.6 percent year-on-year, although the affect on profit margins has been severe.

According to Peter Dixon, an economist at Commerzbank AG, if consumer confidence is going to collapse it is going to happen at a far slower pace than people expect, although the latest figures are merely a short term boost as shops cannot afford to keep cutting prices.

Of the biggest beneficiaries, clothing and footwear have experienced the biggest rise in sales with an increase of 6.1 percent.

Despite some optimism, January is still seen as a dark moth for retails as Zavvi is closing all of its stores today whilst Woolworths has already gone bust with a number of high street chains similarly looking as though they may follow suit.

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