UK's total retail sales up 4.2% in Jan 2023; above 12-mth avg of 2.5%

The country’s like-for-like retail sales increased by 3.9 per cent in January, against an increase of 11.9 per cent in January 2022. This was below the 3-month average growth of 4.9 per cent and above the 12-month average growth of 1.5 per cent, according to the BRC-KPMG Retail Sales Monitor–January 2023.        

Non-food sales increased 2.9 per cent on a total basis and 2.5 per cent on a like-for-like basis over the three-months to January. This is above the 12-month total average growth of 1.6 per cent. For the month of January, non-food was in growth year-on-year.

Over the three months to January, in-store non-food sales increased 7.2 per cent on a total basis and 6.5 per cent on a like-for-like basis since January 2022. This is below the 12-month growth of 17.4 per cent.

Online non-food sales decreased by 3.6 per cent in January, against a decline of 24.2 per cent in January 2022. This is below the 3-month average decline of 2.4 per cent and above the 12-month decline of 9.7 per cent. The proportion of non-food items bought online (penetration rate) decreased to 41.8 per cent in January 2023 from 44.6 per cent in January 2022.

Helen Dickinson, chief executive, British Retail Consortium, said: “As Christmas cheer subsided, retailers felt the January blues as sales growth slowed. Many retailers discounted heavily to entice consumer spend, and while there were bargains to be had in the January sales, retailers continue to be hit by lower margins and falling volumes. Own brand ranges remain popular across non-food products, and big-ticket items are seeing customers trade down.

“The coming months will continue to be challenging for retailers and their customers. With ongoing cost pressures and labour shortages, increases in sales don’t convert into increases in profits or cash. Given that backdrop, retailers can ill-afford the millions lost to the inflexibilities of the apprenticeship levy, so the government must urgently look to change the system so retailers can use the funds to train their workforce to better meet the needs of their businesses and the people who work in them.”

Paul Martin, UK head of retail, KPMG, said: “With inflation running at around 10 per cent, sales growth for January nearly halved in comparison to December to just over 4 per cent—sending a clear signal that consumers have started the year with a tight rein on spending as they face another period of rising costs.

“Sales of clothing continued to prop up the high street, with men’s clothes and shoes the strongest category in January, whilst purchases of energy efficient appliances remained a top purchase for consumers. The decline in sales taking place online continued this month, but is starting to level out and far from the 24 per cent drop in sales that online retailers witnessed a year ago in January.

“As we head into a difficult time for consumers, the short-term outlook for the retail sector remains challenging. With the latest interest rate rise and utility price increases heading our way, shrinking household incomes means we will continue to see a shift in what consumers buy and where they buy from. Retailers face a tightrope as their costs rise and margins are squeezed, whilst at the same time having to ensure affordability and value for customers. Although retailers have demonstrated resilience over recent years, it is likely we will continue to see casualties both online and on the high street this year. Those retailers that have emerged from the pandemic in good shape will benefit from the current situation through market-share growth and consolidation opportunities, but all retailers are facing a tough few months of falling consumer spending in real terms.”

Fibre2Fashion News Desk (NB)