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Surprise increase in Jan sales give some room for optimism, BRC
10
Feb '09
UK retail sales values rose 1.1% on a like-for-like basis, and 3.2% on a total basis, from January 2008. By both measures, this was the best performance since May, when sunny weather had boosted sales.

Non-food sales remained down on a year ago, though by less than in December. Sales were driven by widespread heavy discounting in clearance sales. Despite this clothing, footwear, homewares and health and beauty sales remained down on a year ago.

After a good start to January, sales growth then weakened as clearances ended. Shoppers took advantage of good deals, but many purchases were replacements and essentials rather than discretionary extras.

Non-food non-store sales in January were 19.2% higher than a year ago. This was weaker than the 30.0% gain in December, when people increasingly used the internet for their Christmas shopping.

Stephen Robertson, Director General, British Retail Consortium, said:

“These surprisingly good figures give some room for optimism. Overall sales growth turned positive and is higher than it's been since last May. Food sales growth rose. Non-food sales fell more slowly suggesting January clearance deals released pent-up demand and customers started to spend on goods they've been intending to buy for months.

“But the fundamentals haven't changed. Job fears are mounting. Consumer confidence is at record lows. It remains to be seen whether January's discount driven growth was just a blip.”

Helen Dickinson, Head of Retail, KPMG, said:
"Following three months' year-on-year declines in the total value of retail sales and seven months of declines in like-for-like sales, this appears to be significantly better but the figures don't mean consumer confidence has returned.

The results are heavily skewed by food prices creeping back up again after the heavy promotional activity in December and by a reasonably strong performance in the first week of the month, caused by the continuation of a short-lived pick up in spending immediately after Christmas which ended by the second week.

The divergence in the non-food sectors between those that are doing well and those that are not, continues to grow, meaning the outlook for many retailers, and the industry as a whole, remains challenging."

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British Retail Consortium

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