Retailers start 2013 badly as sales figures fall

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Retail sales figures dropped 0.6 percent
Retail sales figures dropped 0.6 percent Photo: Dominic Lipinski/PA Wire/Press Association Images

How much should we read in to the disappointing January retail sales figures? They dropped 0.6 percent when most economists had been banking on a rise of 0.5 percent.

The main culprit appears to have been the bad weather towards the end of last month.

Snow kept shoppers away from out of town shopping centres and small food shops and they appear to have stocked up by ordering online from the supermarkets, preferring to let someone else brave the driving to deliver the groceries.

But does this herald a triple-dip recession, the first signs that we're heading back into economic slush?

I think not.

For a start, these data are volatile and may be revised. They also fly in the face of surveys from industry bodies which have been far more optimistic. The British Retail Consortium, in particular, was upbeat in its January report last week.

Furthermore, shoppers tend to postpone, rather than cancel altogether, their purchases when the weather turns foul - so we should see much of that spending appear this month.

And drilling down into the numbers, If you strip out a fall in the sales of petrol, sales volumes rose marginally by 0.2% - suggesting it really was the weather, a temporary factor, putting people off driving, rather than a fundamental weakening in consumers' appetite to spend.

So a triple-dip? I think it would be an exaggeration at this stage to forecast such gloom. The wider environment is still tough as data yesterday showing the eurozone economy contracted demonstrated but there is still cause to hope that Britain is turning a corner.