Retail sales enjoyed their strongest growth for four years in January. Retail Week delves down into the BRC-KPMG numbers.
Food faced a very tough comparative in January 2013 when the snow warnings had prompted customers to stock up and the cold weather had encouraged strong sales of hearty food and meat. Unsurprisingly, with temperatures 7 degrees warmer this January, demand was skewed towards vegetables and lighter food instead. Healthy living had a particularly good month and, while the month started with good sales of celebratory drinks, this dried out during the month, following the popularity of Dry January.
Adjusted for food inflation as measured by the BRC-Nielsen Shop Price Index, the three-month average change for food reached a year-on-year low of -1% against -0.2% for the twelve-month average. This slowdown is partly explained by the circumstances explained above but it also seems that shopping habits are changing, favouring more visits to the local convenience shops and discounters to the detriment of the traditional weekly trip to the supermarkets.
↑ Furniture and flooring
Furniture was the best performing category in January and achieved its best performance since April 2006. On a 12-month basis, furniture is the top performing category thanks to the housing recovery, according the BRC. Bedroom furniture and sofas were particularly strong.
January is usually a transitional month for clothing, driven by the Sales and new spring ranges coming into stores. Last month combined both elements in a successful way: there were a lot of good deals to drive footfall into stores and shoppers also bought into the new ranges at full price. Retailers who had already liquidated their stock from Boxing Day to the end of December felt the effect in the form of slightly depleted sales.
In general, there was a strong sales performance across the three segments, but that was also flattered by a soft comparative in 2013, when the snow had kept people indoors. With the relatively mild weather this January, demand was for discretionary items rather than necessity items. There was good demand for blouses, nightwear, and for women’s accessories rather than for heavy coats.
Despite the fact that January was the wettest and mildest in a century, footwear sales were very strong last month. There was continuing good demand for boots, as well as slippers. This represents particularly strong sales given that Footwear had been the top category in January 2013.
↑ Health & Beauty
January was another good month for health and beauty, as shoppers indulged in the deals offered throughout the Sales period. Some of the gifting that had disappointed over Christmas performed well when carrying a reduced price. The health segment was driven by the New Year’s resolutions, with slimming and aides to quit smoking doing particularly well, rather than pharmacy products.
↑ Other non-food
Other non-food was the second best performing category in January, as shoppers reacted well to sales and promotions, giving a very strong start to the month. In electricals, the computing segment levelled out in January, albeit at a high volume. Tablets though continued to drive growth. TV, cameras and washing machines were singled out as particularly good performers, while vacuum-cleaners and small kitchen appliances were again on a roll.
The audio segment has not been performing as well as other electrical items for a while, with retailers blaming a lack of innovation. Consoles continued to provide a strong boost to the leisure segment, while books had their best performance in 18 months. Stationery also experienced a good start to 2014. Last year, sales from department stores had generally suffered from poor footfall during the snow warnings of January: as a result of this soft comparative, there was good growth across the board last month. During the wettest January on record, department dtores provided a better shopping experience than the high street. Furniture was a key driver of the improvement, but clothing and beauty also benefitted from good demand.