Retailers are bracing themselves for a drop in sales growth next month following a better than expected January, according to the CBI.
In a survey of 126 companies, 16% of retailers said sales in January were up, beating the expectation of 9% of retailers.
However, clothing sales for the year to January fell after reporting strong growth for nine consecutive months.
Britain’s biggest business lobby group said sales growth is predicted to slow next month, and orders with suppliers are set to continue falling moderately.
The Confederation of British Industry’s director of economics Rain Newton-Smith, said:
“Retailers have had a steady start to the year through the January Sales period. However, with competition remaining fierce and persistent price deflation in the sector, it’s not surprising the outlook for retailers in February looks subdued. Mild weather looks to have hit clothing sales, but current low oil prices continue to support consumer spending.
“Retailers will be looking to the Budget for decisive action to reform the cumbersome and outdated business rate system.”