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January discounts tempt cautious consumers

Retail sales returned to year-on-year growth in January after a disappointing December, but the British Retail Consortium (BRC) and KPMG warned there is no guarantee the positive momentum will continue.

Sales increased by 2.2% on a total basis for the four weeks to 26 January, compared with the same month in 2018 – the highest rate of growth since last June, the BRC-KPMG Retail Sales Monitor shows.

UK retail sales increased by 1.8% on a like-for-like basis on January 2018, when they had increased 0.6% from the previous year.

However, over the three months to January, total non-food retail sales in the UK decreased 0.4%, a greater fall than the 12-month average decrease of 0.2%.

Total in-store non-food sales declined 2.6% for the same period, while the 12-month total average decline was 2.3%.

Online non-food sales experienced 4.8% growth in the last three months, the lowest since BRC and KPMG started collecting the data in 2012.

BRC chief executive Helen Dickinson said: “There was a welcome return to growth this month after December’s disappointing sales figures. But while retail discounts helped tempt cautious consumers, there is no guarantee this momentum will continue after the sales have finished. And it will not just be bricks-and-mortar stores looking nervously to the future, as online sales continued to grow below the long-term trend.

“Furthermore, the risk of a disruptive no-deal Brexit could see these fortunes reversed. Unless the government want to see well-known brands disappearing from our high streets in 2019, they should work with their colleagues in parliament to find a solution that avoids the shock of a no-deal Brexit on 29 March and removes the risks to UK consumers.”

Paul Martin, UK head of retail at KPMG, added: “Following the worst December trading performance in a decade, January brought a welcome improvement with total retail sales up 2.2%. Having said that, this increase points more to British shoppers’ obsession of bagging a bargain and price inflation, rather than any real improvement, and these peaks and troughs continue to leave retailers feeling increasingly anxious.

“The colder weather and continual discounting drove up fashion sales. However, not all categories or players have been so fortunate, and even online growth continued to slow.”

 

Readers' comments (1)

  • The BRC is statement is ridiculous. It states about there is 'no guarantee' that the positive momentum will continue, but there is no guarantees about anything, so it is just plain daft. Plus the usual whinge fest regarding BREXIT, of which again, nobody really knows what is going to happen. If brands do disappear - no bad thing as a shake up is required - it will be because they simply are no longer wanted or relevant. That has happened throughout time and will continue to do so in the years ahead.

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