‘Lacklustre’ retail sales in January

UK retailers saw slow growth in sales last month as consumers kept a close eye on their spending.

Total retail sales across the UK increased by just 1.2% year-on-year in January, down from 4.2% growth in the same month a year ago, according to data from the British Retail Consortium (BRC) and KPMG.

Price cuts in the January sales helped to boost spending in the first two weeks, but this was not sustained throughout the month, said BRC chief executive Helen Dickinson.

“Larger purchases, such as furniture, household appliances and electricals, remained weak as the higher cost of living continued into its third year,” Dickinson explained.

Clothing and footwear sales also performed poorly due to the milder temperatures, although health and beauty products continued to sell well, she added.

Shoppers with healthy new-year resolutions and holiday plans gave a boost to sports and travel equipment sales, which were up over 4% year-on-year, said Linda Ellett, UK head of Consumer Markets, Leisure & Retail at KPMG.

However, Ellett noted that although there are some positive signs with mortgage rates coming down and shop inflation falling to its lowest level in over a year, “the feel good factor has yet to materialise at the tills”.

Sarah Bradbury, chief executive of grocery sector analyst IGD, said: “We can see that households have had to be mindful with their spending in January. Nearly a third of households with children at home claimed to have bought on credit over Christmas, so some households — particularly less affluent ones — will likely cut back a little to pay off this festive spending.

“While wage growth is now ahead of inflation, it will be some time before real incomes recover to their pre-crisis levels and consumer spending fully recovers.”