Retail sales rise in January despite non-food plunge

UK retail sales went up 0.6% on a like-for-like basis and 1.4% overall in the four weeks to January 27, largely in line with three- and 12-month averages of 1.5% and 1.6% respectively.

According to the BRC-KPMG Retail Sales Monitor, non-food like-for-like sales dropped 1.2% and 0.6% overall on a three-month basis.

This poor performance also saw non-food’s 12-month sales average decrease 0.1%, marking the first time the 12-month average has fallen into negative territory since September 2009.

This was compounded by flagging bricks-and-mortar sales of non-food items, which dropped 3.6% in like-for-like terms and 2.9% overall in the three months to January.

By contrast, online sales of non-food items rose 5.3% in January – although this was below the three-month and 12-month averages of 6.6% and 7.8% respectively.

KPMG’s head of retail Paul Martin said: “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.”

Food

Food sales jumped 2.9% in like-for-like terms in the three months to January, and were up 4.1% overall.

This remains above the average 12-month growth of 3.7%, which is the highest since November 2012.

BRC chief executive Helen Dickinson said: “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.”

“January typically presents retailers with a tough gig persuading shoppers to spend in what is a cash-strapped month for most,” added Martin.

“With that in mind, 1.4% growth – or 0.6% on a like-for-like basis – has to be seen as a success, albeit food sales continue to be the driver of this growth.”