UK retail sector faces slow growth in January 2024: BRC

Non-food sector experienced a YoY decrease of 1.8 per cent over the three months leading to January. This decline is sharper than the 12-month average decline of 0.5 per cent and marks a significant reversal from the 2.9 per cent growth recorded in January 2023. Specifically, for the month of January, the non-food sector reported a YoY decrease.

In-store sales of non-food items also faced difficulties, with a 1.5 per cent decrease YoY over the three months to January, a stark contrast to the 7.2 per cent growth seen in January 2023. This performance is below the 12-month average growth rate of 0.8 per cent, as per BRC.

The online non-food sales sector was not spared from the downturn, recording a 4.2 per cent decline YoY in January. This decline is more pronounced than the 4.1 per cent decrease reported in January 2023 and exceeds both the three-month and twelve-month average declines of 2.3 per cent and 2.8 per cent, respectively. Additionally, the penetration rate of non-food items purchased online saw a slight decrease to 35 per cent in January from 35.4 per cent in January 2023.

Helen Dickinson OBE, chief executive of the British Retail Consortium, said:
“Easing inflation and weak consumer demand led retail sales growth to slow. While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month. The milder temperatures meant clothing sales performed poorly, particularly winter clothing and footwear.

“With the Spring Budget in sight, and a general election looming, government cannot afford to ignore the needs of retailers and their customers. Employing three million people and supporting families and communities in every corner of the country, retail is the ‘everywhere economy’. By addressing the cumulative burdens, from business rates’ rises, to ill-conceived new recycling proposals to border control costs, the next government can unlock retail investment and boost local and national economic growth.”

Linda Ellett, UK head of consumer markets, leisure and retail, KPMG, said:
“It may be a new year, but the hangover of low consumer confidence remains, with retail sales growing by a lacklustre 1.7 per cent on the high street, and online operators seeing yet another month of negative sales performance.

“The extraordinary weather conditions across large parts of the country did little to encourage shoppers out on to the high street, whilst continued industrial action on the rail network was unhelpful for city centre locations. Whilst there are some positive signs that mortgage rates are starting to fall and stabilise, and shop inflation has fallen to its lowest level in over a year, the feel good factor has yet to materialise at the tills.”

Fibre2Fashion News Desk (DP)