Positive retail sales increase in January

BRC has confirmed an increase in overall retail sales for the four weeks from 31st December 2017 to 27th January 2018.

• In January, UK retail sales increased by 0.6% on a like-for-like basis from January 2017, when they had decreased 0.6% from the preceding year.
• On a total basis, sales rose 1.4% in January, against a growth of 0.1% in January 2017. This is roughly in line with the 3-month and 12-month averages of 1.5% and 1.6% respectively.
• Over the three months to January, In-store sales of Non-Food items declined 2.9% on a Total basis and 3.6% on a Like-for-like basis. On a 12-month basis, the total decline was 2.3%.
• Over the three months to January, Food sales increased 2.9% on a like-for-like basis and 4.1% on a total basis. This remains above the 12-month Total average growth of 3.7%, the highest since November 2012.
• 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. This is below the 12-month Total average decrease of 0.1%, the first 12-month average decrease since September 2009.
• Online sales of Non-Food products grew 5.3% in January, against a growth of 8.0% in January 2017. This is below the 3-month and 12-month averages of 6.6% and 7.8% respectively. Online penetration rate increased from 21.9% in January 2017 to 22.2% in January 2018.

Helen Dickinson OBE, Chief Executive, British Retail Consortium

“The persisting tough trading environment played out at the start of the year with a mixed set of trading updates and subsequent announcements. Sales as well as profits are seemingly harder to come by. Against this challenging back-drop, 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.

“The figures paint the same old picture of divided fortunes for food and non-food sales. Rising food prices continued to inflate sales growth and absorb the lion’s share of shoppers’ squeezed budgets, while sales of non-food items struggled in January, dragging the 12- month average into negative territory for the first time in nine years.

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

Paul Martin, Head of Retail, KPMG

“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 per cent growth – or 0.6 per cent on a like-for-like basis – has to be seen as a success, albeit food sales continue to be the driver of this growth.

“There was little growth in most categories besides food. Bigger ticket items such as furniture traditionally rely on strong post-Christmas trade, but this year seem to have struggled to woo consumers with the lure of a sale sign in the window. Online sales fared better, with bargain hunters most interested in fashion and tech.

“With Christmas reporting now behind us, the true financial health of the industry comes into focus. For many retailers, online sales have taken the sting out of the challenging trading environment. It’s therefore not surprising to see many retailers rethink their physical presence. Ensuring you can deliver a customer-centric and channel agnostic proposition will increasingly split the winners from the losers in 2018.”

Joanne Denney-Finch, Chief Executive, IGD

“Food and grocery sales stayed resilient this month, maintaining the trend from 2017. This is in spite of the tradition in January for people to cut back on indulgences. From our research, 85 per cent of shoppers claim to be trying to improve some aspect of their diet.

“Shoppers remain attracted by innovation and quality. Two-thirds, 66 per cent, say they are sometimes tempted to pay extra for premium quality food and drink products.”

Source: Insight DIY Team & BRC 

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