Food sales power better than expected January

UK retail sales increased last month by 0.6% compared to the same time in 2017, when they decreased 0.6% from the preceding year, according to BRC and KPMG.

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. 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,” says Paul Martin, Head of Retail, KPMG “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.”

He adds: “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. Ensuring you can deliver a customer-centric and channel agnostic proposition will increasingly split the winners from the losers in 2018.”