As shoppers opted to hold on to their hard-earned cash, spending on the essentials like food, January, a typically hard month for UK retailers showed sluggish growth according to the latest data from the British Retail Consortium (BRC) and KPMG.
The latest figures from the British Retail Consortium show growth in retail post-holiday season was sluggish at best. In January, UK retail sales crept up 0.6% from the same period last year. Food sales increased 2.9% on a like-for-like basis and 4.1% on a total basis bucking the trend. However, higher prices accounted for much of the growth.
Non-food sales drop
People hunting for bargains post-Christmas tend to drive bigger ticket items such as furniture and white goods but as inflation and dwindling wages bite, shoppers were not drawn by sales.
Total sales rose 1.4% against 0.1% seen in January 2017. In store sales of non-food items suffered more with a decline in total sales of 2.9%.
Over the three-months to January, non-food retail sales in the UK decreased 1.2% on a like-for-like basis and 0.6% on a total basis falling below the average decrease of 0.1%, for the first time since September 2009.
Although, buoyant online sales seen in the past were tempered somewhat, growing by 5.3% in January against a growth of 8.0% in January 2017, online sales had a better showing with fashion and tech bargain hunters helping to drive growth.
Silver lining sales
Despite the rocky start, Paul Martin, head of retail, KPMG saw a silver lining and said in a statement: “January typically presents retailers with a tough gig persuading shoppers to spend in what is a cash-strapped month for most. With that in mind, 1.4% growth – or 0.6% on a like-for-like basis – has to be seen as a success, albeit food sales continue to be the driver of this growth."
BRC's CEO, Helen Dickinson ascribes the results to the current economic environment and delivers a wish for retailers: “Overall though, the going remains bumpy as consumers are still seeing wages fall in real terms. Although inflation will ease a bit this year these pressures will remain. So to ensure no more pain is added to household budgets, we want to see our Brexit negotiators focus on delivering the terms of the transition to provide businesses and consumers with some much needed certainty.”