Retail Sales Volumes Rise In January

The ONS has reported on retail sales, covering the three months to January 2020.  The data shows that January's performance improved significantly on the sales slump experienced in December, and provides a boost to the sector following the worst year on record for retail. 

Main points:

• The quantity bought in the retail sales industry fell by 0.8% when compared with the previous three months, with declines across all sectors.
  
  
• Retail volumes increased by 0.9% in January 2020, recovering from the falls in the previous two months; the increase was mainly because of moderate growth in both food stores (1.7%) and non-food stores (1.3%).
  
  
• Fuel saw a large fall of 5.7% in the quantity bought in January 2020 when compared with December 2019, which coincides with a rise in fuel prices of 2.3 pence per litre between December and January (consumer price inflation, January 2020).
  
  
• Online sales as a proportion of all retailing was 19.0% in January 2020, down from 19.3% in December 2019.

In the three months to January 2020, both the amount spent and the quantity bought in the retail industry fell by 0.5% and 0.8% respectively when compared with the previous three months.

In contrast, the monthly picture was one of growth at 1.2% and 0.9% for the amount spent and the quantity bought respectively, mainly because of a recovery from a weak November and December 2019. When compared with a year earlier, both measures reported growth at 2.1% for the amount spent and 0.8% for the quantity bought.

Clothing and footwear experienced the highest growth, with the ONS reporting a sales increase of 3.9% for the month, while department stores reported a 1.6% increase in sales.  Sales at household goods stores experienced a 1.1% decline.

Since June 2019, there has been a slowdown in the quantity bought, with successive declines in the three-month on three-month movement from November 2019. The quantity bought in January 2020 when compared with the previous three months was negative 0.8%.

While the monthly growth rate in January 2020 increased by 0.9%, this follows two consecutive months of decline in November 2019 at 0.8% and December at 0.5%.

Deloitte

Commenting on today’s ONS retail sales figures, Ian Geddes, head of retail at Deloitte, said:

“Consumers have entered the new decade on a confidence high, counteracting the seasonal dip that January usually brings. Reflecting this, retail sales values and volumes both saw some growth in the first month of the year, increasing month-on-month by +2.2% and +1.2%, respectively. The three-month trend remained down due to weak trading in November and December.

“Whilst this is positive news for retailers, following a difficult Christmas for some that was punctuated by deep discounting, some lingering caution remains. Consumers may still be in ‘careful shopping mode’, but for how long is yet to be seen.

“In recent years we have seen the emergence of a more conscious consumer, equipped with greater awareness of the ethical and environmental impact of what they buy. For some, this has simply meant buying less and decluttering or, in fashion, buying into new services such as wardrobe rentals.

“For other consumers, the event of a new year has kick-started new habits, be it switching to a plant-based diet for ‘veganuary’, or restricting alcohol consumption for ‘dry January’. Retailers are catering to these seasonal trends more than ever, bringing new product ranges to shop floors that match changing consumer tastes.

“Similar changing behaviours are also reflected in the growth of online sales, which has increased +4.9% this month, but increasing at a much slower pace year-on-year.”

Source : ONS and Insight DIY Team

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