High street prices decline says Verdict

18 Jan '06

3 min read

heavily towards these operators.

Secondly we estimate space growth will have added nearly £1bn of extra sales to the BRC sample, contributing about
3.0% to December's figures.

A high proportion of this extra space has come from transferal of ownership (with much of it coming from non BRC members) rather than from new trading space, particularly in the grocery sector.

Therefore it adds a raft of new space to the BRC membership, but removes that space from the remaining retail pot.

Thirdly the timing of Christmas added two extra trading days – the Saturday of Christmas Eve and Boxing Day Monday.

Retailers have been much tighter with their stock this year and not only has there been less going into the sales, it has
been genuine sale stock and less attractive to consumers.

Hence the first few days of the sales were good, but we believe performance will have fallen sharply at the beginning of the New Year.

When the ONS publishes its figures at the end of the month we are expecting less bullish figures. However, after
reporting two months of almost flat growth, the trend for a much sharper peak in December is highly likely.

That said while December will therefore be much stronger, growth for the last quarter of the year will still be conservative.

January will start 2006 off on a low note, there is unlikely to be a further cut in interest rates until much later in the year and costs are rising.

Therefore few retailers will be breaking out the champagne just yet.

Retail Verdict

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