Retail sales growth ‘ground to a halt’ in January

UK retail sales fell 0.6% on a like-for-like basis in the four weeks to January 28, the BRC KPMG Retail Sales Monitor said.

Total sales edged up 0.1% year-on-year, off the back of a 3.3% increase in the same period last year.

BRC chief executive Helen Dickinson said the slowing sales growth was “compensated only by stronger furniture sales and a boost for some retailers from Chinese New Year”.

She said: “While this may appear disappointing overall, retailers were up against a strong January last year to try and deliver a repeat performance and many reported an increase in the number of returns received in January.”

Looking across the last three months, Dickinson said retail sales registered the slowest growth of the festive period since 2009.

This was driven by slowing non-food sales.

Non-food retail sales rose 0.2% on a like-for-like basis in the three months to January, and 0.3% on a total basis, falling below the 12-month average growth of 0.8%.

Food sales increased 0.6% on a like-for-like basis and 2.0% on a total basis.

“These figures suggest that ‘caution’ was top of New Year shopping lists and the uptick in credit card lending at the end of the last year may be short lived,” Dickinson added.

“With the signs pointing to upward pressures on shop prices given rising import costs, all eyes will be on the impact of inflation on consumer spending.

“That said, retailers are a resilient and innovative bunch. They have become increasingly adept at responding to the challenging environment, and as a result the industry has been a key driver of recent UK productivity growth.”

KPMG UK head of retail Paul Martin said: “As is historically the case in January, furniture sales experienced strong performance. Food and drink sales remained in the black, much to the relief of grocers.”

Online retail sales

According to the BRC KPMG online retail sales monitor, online sales of non-food products in the UK grew 8.0% in January, compared with a 14.9% increase a year earlier. 

This is below the 3-month average of 8.6% and the 12-month average of 9.5%.

Over the three months to January, online sales jumped 8.6%.

Dickinson said the 8% growth fell below the recent trend as online sales were set against a strong comparative period.”

”It was stores that bore the brunt of the slowdown, posting their deepest three-month decline on record (2.2%) as the demand during retailers’ clearance sales was predominantly online.

”As the clearance events came to an end, full price items didn’t attract the same demand, echoing a sense of caution from consumers,” she said.