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Published: Wed, February 08, 2017
Economy | By Melissa Porter

Consumers start to feel the pinch as United Kingdom retail sales slow down

Consumers start to feel the pinch as United Kingdom retail sales slow down

According to the latest BRC-KPMG Retail Sales Monitor January 2017, total sales rose 0.1% against a 3.3% increase in January 2016, whilst like-for-like sales fell by 0.6% compared to an increase of 2.6% from the preceding year.

When accounting for January alone, like-for-like sales dropped 0.6% on an annual basis, after rising 2.6% during the first month of 2016.

That missed forecasts for an increase of 0.9% following the 1.0% gain in December.

The British Retail Consortium said that like-for-like sales, a measure which strips out changes in the number of retailers and floor space, fell 0.6% on the year in the four-week period from January 1 to January 28. This is below the 12-month total average growth of 0.8%, which is the lowest since July 2012. "While this may appear disappointing overall, retailers were up against a strong January a year ago to try and deliver a repeat performance and many reported an increase in the number of returns received in January".

"Looking across the last three months, we've seen the slowest growth of the festive period since 2009".

The BRC said consumers were feeling cautious going into the new year.

Analysts said the retail sales figures as a whole suggest that shoppers might be starting to cut back on spending as their disposable income is squeezed by rising prices and growing personal debt.

The figures were largely driven by slower non-food sales, although spending on groceries held up.

The increase in online sales last month was also below the three-month average of 8.6 per cent and the 12-month average of 9.5 per cent, underscoring how tough conditions are across the board in retail.

Further, online sales grew by 8.6% over the three-months to January, which was much better than the in-store sales which declined 2.2% on a total basis.

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