Following a disappointing Christmas period, total retail sales rose 4.2 per cent year-on-year in January, according to data published today.
The latest British Retail Consortium (BRC)-KPMG Retail Sales Monitor shows that on a like-for-like basis trade across the sector improved by 2.3 per cent compared to January 2010 when sales fell 0.7 per cent against the previous year.
Larger and longer clearance sales than usual will have helped trade, as will the decision by many retailers to postpone the impact of the VAT rise on the customer.
Stephen Robertson, Director General of the BRC, said: “On the surface, this is the best sales growth since last March, but that’s not the whole story. Comparisons are with a feeble, snow-hit performance a year ago.
“Growth this January was driven by a relatively short but strong burst of non-food buying early in the month. Clearance discounts and a last chance to beat the VAT rise got people buying things like furniture and electricals in the first few days.”
It seems that trade slowed significantly in the latter part of the month, with a huge fall in consumer confidence and commodity prices such as food continuing to increase affecting retail sales.
Business on the high street was given a welcome boost in the month but most concede that it is too early to assess how healthy consumer demand really is and sales are likely to fall off in the coming months.
Helen Dickinson, Head of Retail at KPMG, added: “January’s results were heavily impacted by strong trading in the first week of 2011, against poor comparatives due to the snow at that time last year, while the remainder of the month was more indicative of the underlying trend of sales dipping in and out of negative territory across all sectors other than food.
“Falling disposable incomes will continue to exert pressure on sales in the first quarter of the year, traditionally the weakest period of trading as consumers cut back on spending post-Christmas.”