Retailers enjoy sales growth in typically tough January

january retail sales

The UK retail industry has enjoyed a month of sales growth despite facing challenging conditions during the typically a tough period over January.

The latest monthly Retail Sales Monitor from the British Retail Consortium (BRC) and KPMG showed like-for-like retail sales rose 0.6 per cent in January, compared with a fall of 0.6 per cent for the same month last year.

Meanwhile, total sales rose 1.4 per cent last month compared to a rise of just 0.1 per cent a year ago.

Experts have hailed it as a decent performance for the industry, considering how the immediate weeks after Christmas are often tough times for retailers.

“The persisting tough trading environment played out at the start of the year with a mixed set of trading updates and subsequent announcements,” BRC chief executive Helen Dickinson said.

“Sales as well as profits are seemingly harder to come by.

“Against this challenging backdrop, 2018 didn’t have a bad start during what is traditionally a lean month, with sales creeping up in line with the year’s average.”

However, there was a stark difference in performance between food and non-food sales, thanks to a continuing income squeeze on the back of higher inflation and weaker wage growth, leaving consumers with less spending money.

Food sales increased increase 2.9 per cent on a like-for-like basis in the three months to January, while total sales rose 4.1 per cent over the period.

However, like-for-like non-food retail sales fell 1.2 per cent and dropped 0.6 per cent on a total basis, which is below the 12-month average decrease of 0.1 per cent and marks the first 12-month average drop since September 2009.

Non-food sales did better online, rising 5.3 per cent in January – but it was still much slower than the eight per cent growth booked in digital sales in the same month last year.

In-store non-food sales also fell 2.9 per cent on a total basis during the three months to January, and 3.6 per cent on a like-for-like basis.

“Clothing, however, bucked the winter trend for the non-food categories,” Dickinson said.

“Some retailers were able to scale back promotions, having shifted more of their stock during the festive sales than last year, and saw encouraging early demand for their new season ranges.

“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.”

Meanwhile, separate retail sales figures from Barclaycard showed consumer spending grew 3.9 per cent year-on-year last month, thanks to a 4.1 per cent rise in spending on everyday essentials.

Unlike BRC/KPMG’s sales monitor, Barclaycard said spending on non-essentials grew 3.8 per cent in January – but this was still slower than the 4.2 per cent growth recorded in December.

Barclaycard also recorded a double-digit rise in pubs and restaurants – up 12.8 per cent and 10.5 per cent respectively.

Managing director Paul Lockstone said it was a strong start to the year in terms of spending, but “faltering confidence levels” suggested consumers were suffering from a “post-Christmas slump” and the wider impacts of inflation.

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