Retail sales jump in January as cold snap drives fashion and footwear

The busier month of trading came as a boost to retailers after sales volumes dipped 1% in December, due to the Black Friday effect and unseasonably warm weather.

“The prospects for 2016 look positive, as shoppers continue to find themselves with more to spend thanks to a mix of falling food and fuel prices and rising wages”

Keith Richardson, Lloyds Bank Commercial Banking

Non-food stores collectively recorded a 4.6% increase in volumes during January, with household goods specialists posting a 3% uplift, according to the Office for National Statistics.

Sales volumes increased 6.8% in department stores last month, while online sales volumes jumped 11.5% on the year.

The amount of good purchased in food stores rose 4.2% compared to January 2015, but sales values only increased 1.4% as ongoing food deflation drove average prices down 2.4%.

Grocers were not the only retailers to report falling prices though, as average prices decreased 1.8% in general merchandise stores and 1.9% in department stores.

That drove sales values up 6.6% in department stores and 2.8% in non-food stores. The value of online sales increased 10.4% in January, as the average weekly ecommerce spend hit £863.5m.

The overall 5.2% rise in sales volumes compared to the same period in 2015 marked the 33rd consecutive month of year-on-year volume growth. Retail sales also advanced 2.3% on a monthly basis, the ONS said.

Winter warming

Keith Richardson, managing director of the retail sector at Lloyds Bank Commercial Banking, attributed non-food retailer’s sales uplifts to the “long overdue arrival of winter”.

“A cold snap brought shoppers flocking to the high street looking for winter coats, jumpers and footwear, while bargain-hunters sought to maximise on the post-Christmas sales by buying big-ticket items such as furniture and other homeware,” Richardson added.

“Having got off to a good start, the prospects for 2016 look positive, as shoppers continue to find themselves with more to spend thanks to a mix of falling food and fuel prices and rising wages.

“But with headwinds such as the introduction of the national living wage and proposals to change Sunday trading hours on the horizon, retailers will need to protect margins more than ever this year.

“Maximising online to open up new markets, while also trying to persuade shoppers to break their bargain habit, are still the major goals.”