Retail sales volumes rise but discounts and sales give 'false impression'

RETAIL sales volumes rose more strongly than expected in the last quarter of 2008, but experts said they were boosted by significant discounting.

According to the latest figures from the Office for National Statistics, retail sales grew 3.6 per cent in the three months to January compared to the same period in 2008 and were 0.7 per cent higher last month than in December.

The ONS said the rise was driven by an increase in sales in textiles, clothing and footwear stores – all of which had significant discounting.

Howard Archer, chief UK economist for IHS Global Insight, said: "The relatively healthy rise in retail sales volumes in January does little to dispel belief that consumer spending will be extremely weak through 2009."

The figures came as department store chain John Lewis issued another downbeat weekly sales update, with sales 3.2 per cent lower than the same week in 2007. Edinburgh was the group's second worst performing store in the week to Valentine's Day, sales dropping 14.5 per cent. Glasgow also fell, by 8.1 per cent, but Aberdeen bucked the trend as the only store in the group to report positive sales results, up 0.5 per cent.