The January blues were alive and well in UK retail, with the industry suffering its weakest post-Christmas trading period in four years.
The latest monthly CBI Distributive Trades Survey found that as household spending remained under pressure, the volume of sales grew at a slower pace than anticipated for the third consecutive month in the year to January.
The survey found that sales for the season were the weakest against regular seasonal norms in more than four years while orders placed on suppliers also fell against expectations of growth.
READ MORE:
- Retail footfall takes a hit over Christmas
- Online retail sales slows down sharper than expected
- Inflation offers some relief
- Alarming drop in retail sales volumes
- Footfall sees sharpest decline in 4 years
- December consumer confidence drops to lowest levels for 2017
- Inflationary pressures lead to lacklustre retail sales
Overall, one third of of retailers said sales volumes were up in January compared to the same period a year ago, and 21 per cent said they were down – giving a balance of 12 per cent that undershot the forecast 17 per cent.
On a season basis, just nine per cent of retailers reported their volume of sales were good while 25 per cent said they were poor, giving a balance of -17 per cent – the lowest since July 2013.
Meanwhile, robust growth in sales for grocers and non-store retailers offset a decline in furniture and carpets and specialist food and drink.
However, online sales skyrocketed 55 per cent, the fastest rate since this time last year and beating expectations of a marked slowdown in growth, with a similar rise expected next month.
Looking ahead, the general sentiment of the 107 retailers surveyed was they expected similar growth in sales and for orders with suppliers to remain flat.
“Retailers have seen fairly modest sales growth this month overall, but it is online retailers who have set the pace during the January sales,” CBI head of intelligence Anna Leach said.
“Household spending will remain under pressure this year from higher inflation and low wage growth, which will continue to weigh on sales growth in the retail sector.”
The survey results come as the latest BDO Sales Tracker showed like-for-like sales across all retail categories were up 0.33 per cent, compared with a four per cent drop during the same week last year.
Cold weather also led to a 0.5 per cent drop in overall footfall, dragged down by a 2.9 per cent drop in shopping centres and a 1.1 per cent dip in retail parks.
However, footfall on the high street rose by one per cent.
Like CBI’s survey, online sales were also highlighted as the star performer in the BDO Sales Tracker, remaining “very strong” across all categories.
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