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UK retail sales growth slow in January amid weak demand

Feb 8, 2024 United Kingdom
UK retail sales growth slow in January amid weak demand
UK retail sales slowed in January, rising by just 1.2%, against a growth of 4.2% in January 2023, the British Retail Consortium said, warning that the high cost of living is entering its third year
According to the latest British Retail Consortium-KPMG Retail Sales Monitor, total retail sales in the UK increased by 1.2% in the four weeks to the 27th of January, as compared to a growth of 4.2% in the same month a year ago. This figure was also below the 3-month average growth of 1.9% and the 12-month average growth of 3.4%.

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”, commented Helen Dickinson, Chief Executive of the British Retail Consortium.

While food sales grew year-on-year in January alone, non-food sales continued their downward trajectory, falling by 1.8% in the three months to January, against a growth of 2.9% in the same period of last year, with winter clothing and footwear sales underperforming due to milder temperatures. Sales of big-ticket items such as furniture, household appliances and electrical goods also remained weak, said Dickinson.  Only health and beauty products continued to sell well.

The data also shows that online non-food sales decreased by 4.2% in the first month of 2024, as compared to a decline of 4.1% in the same month of last year. However, this figure was higher than the 3-month decline of 2.3% and the 12-month decline of 2.8%.

“It may be a new year, but the hangover of low consumer confidence remains”, pointed out Linda Ellett, UK Head of Consumer Markets, Leisure & Retail, KPMG. “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”, she added.

As a result, “it remains a difficult environment for retailers facing into significant downward pressures on demand, a strong promotional environment and uncertainty hitting supply chains due to rising geopolitical tensions”. They will be hoping for “continued good news on the economy” and for the Chancellor’s forthcoming Budget “to give consumers that lift they need to start spending again”, she concluded. 

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