Good news for retailers as sales expected to rebound

Retailers will be given some cheer today when figures show sales volumes rebounded last month despite the snow storms which blanketed many parts of Britain.

Economists are expecting a 0.5% month-on-month rise in sales in January, amid signs shoppers were tempted out by clearance sales and treated themselves to must-have technology.

The expected return to growth will boost hopes the UK economy can avoid a triple-dip recession and will be welcome news after a spate of high profile retail collapses and a dismal 0.1% fall in volumes over the crucial December trading period.

Fears that snow and ice in mid-January would deter shoppers were calmed by the British Retail Consortium's figures for the first two weeks of January, which showed a strong start to the year with like-for-like sales up 3%.

Philip Shaw, chief economist at Investec, said: "It is feasible that the survey is correct and retail sales are recovering. Employment has risen by over 500,000 over the past year while real net household incomes are estimated to have risen by 2.8% in the year to the third quarter."

He is expecting a 0.6% rise in monthly volumes, but said: "More importantly this would increase our confidence that the economy is about to recover gradually rather than fall into a triple dip."

The BRC said shoppers bought televisions, tablet computers and smartphones and demand for footwear was strong, with Wellington boot sales boosted by the snow.

But it found the surge in online sales growth over Christmas slowed to 10% last month, with the benefits of shopping from home in the snow outweighed by concerns about collecting in-store.

Howard Archer, chief UK and European economist at IHS Global, said: "The BRC survey not only diluted concerns that the snow could have had a serious dampening impact on the economy, but it raised the possibility that consumers could be reasonably active over the coming months and help the economy grow."

But there are still signs of the fragile position for retailers after a spate of high profile retail collapses this year.

Fashion chain Republic was the latest big name to call in administrators this week, joining the likes of HMV, Jessops and Blockbuster, which all collapsed last month.