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Internet sales rose 18.5pc in December but retailers face tough times ahead.

Internet sales rose 18.5pc in December but retailers face tough times ahead.
Tuesday January 10 2012

A “dazzling” week before Christmas helped like-for-like sales rise 2.2pc in the crucial month, their strongest since January, according to a key survey by the British Retail Consortium (BRC) and KPMG.

Sales of clothing and footwear had “a pretty spectacular month” following dire trading in the autumn’s mild weather while food sales enjoyed their strongest growth for a year on the back of special offers.

But big-ticket items, including furniture and TVs, continued to suffer in December amid weak consumer confidence.

The upbeat figures will not ease fears over the beleaguered sector’s future.

Helen Dickinson, head of retail at KPMG, said: “Sadly, no-one expects this level of demand to be indicative of the year ahead.”

A separate survey from professional services firm Deloitte yesterday revealed that the total number of retailers in England and Wales falling into administration in 2011 increased by 11pc to 183 last year. More failures are expected in coming weeks.

December’s sales figures were flattered by easier comparisons with the previous year, which was wrecked by Arctic weather.

And retailers brought forward special offers in the lead-up to Christmas instead of waiting for the traditional January sales.

BRC director general Stephen Robertson said: “A solid December result hasn’t rescued a pretty miserable year. Post-Christmas offers brought large numbers of shoppers out but that was generally a short-lived hunt for bargains. We’re not witnessing any fundamental change in customers’ circumstances.

“With discounting driving sales at the expense of margins, the key question for retailers is about earnings from those sales.”

Internet sales rose 18.5pc in the month, as they rebounded from November’s lows, boosted by free delivery and early sales, making it the biggest ever online Christmas.