Retail sales nudge up in January but non-food struggles

Overall UK retail sales were up 0.6% on a like-for-like basis in January but non-food sales (which includes clothing) struggled and recorded their first 12-month average decrease since September 2009.

Rising food prices contributed to an increase on food spending which was up 2.9% on a like-for-like basis and 4.1% on a total basis in the three months to January; and this increase ate into shoppers' budgets for non-food items, according to the latest figures from the BRC and KPMG.

The January Retail Sales Monitor compiled by the two organisations show that on a total basis retail sales rose 1.4% in January, against a growth of 0.1% in January 2016. This is roughly in line with the three-month and 12-month averages of 1.5% and 1.6% respectively.

Overall non-food retail sales in the UK decreased 1.2% on a like-for-like basis and 0.6% on a total basis in the three months to January. This is below the 12-month total average decrease of 0.1%, which is the first 12-month average decrease since September 2009.

Over the three months to January, in-store sales of non-food items declined 2.9% on a total basis and 3.6% on a like-for-like basis. On a 12-month basis, the total decline was 2.3%. Online sales of non-food products did grow by 5.3% in January, but this compares to a growth of 8% in January 2017 and is below the three-month and 12-month averages of 6.6% and 7.8% respectively.

BRC chief executive Helen Dickinson said that January wasn't a bad start to the year overall but the picture was mixed. "The figures paint the same old picture of divided fortunes for food and non-food sales. 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," he said.

“Clothing however, bucked the winter trend for the non-food categories. Some retailers were able to scale back promotions, having shifted more of their stock during the festive sales than last year, and saw encouraging early demand for their new season ranges," Dickinson said.

She added that as the pressure continues on retailers it was important the the government's Brexit negotiators provide some much needed clarity for the sector. “[...] the going remains bumpy as consumers are still seeing wages fall in real terms. Although inflation will ease a bit this year these pressures will remain. So to ensure no more pain is added to household budgets, we want to see our Brexit negotiators focus on delivering the terms of the transition to provide businesses and consumers with some much needed certainty.”