Retail sales slide in January as lockdown restrictions hammer stores

Oxford Street
Oxford Street, January 2021. © TheIndustry.fashion

Retail sales slid in January as the latest national lockdown hammered shops across the UK, according to new figures.

The BRC-KPMG Retail Sales Monitor for the month showed a slump in total sales, while a separate report from Barclaycard has revealed the sharpest fall in consumer spending since May.

The British Retail Consortium (BRC) revealed that total retail sales fell by 1.3% in January as rapid online growth failed to entirely offset the plunge in store sales.

Over the three months to January, sales of non-food items in stores dived by 36.5% as retailers were heavily impacted by the January lockdown.

Total non-food sales were 5.6% lower for the period as online clothing and homeware sales only partially offset closures.

Meanwhile, food sales jumped by 7.9% for the three-month period as grocery stores remained open to shoppers.

Helen Dickinson, chief executive of the BRC, said: “January saw retail sales growth decline to its lowest level since May of last year.

“The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending – especially on clothing and footwear.

“Meanwhile, retailers have worked incredibly hard to expand their online delivery and click and collect offerings to ensure everyone can get the products they need during lockdown.

“This has led to record growth for online non-food sales and is a testament to the resilience and innovation of retail, which in the face of the pandemic, has rapidly adapted and invested in online platforms and delivery logistics.”

Paul Martin, UK head of retail at KPMG, said: “Computing was the hot category and saw triple figure growth online as schools closed and parents rushed to purchase laptops and printers.

“Meanwhile, clothing retailers continued to struggle with physical sales down across all categories.”

A separate report by Barclaycard revealed that consumer spending slumped by 16.3% in January, representing the sharpest decline since May in the face of the latest lockdown.

The analysis of credit and debit card spending showed that shoppers spent almost-a-quarter less on non-essential items against the same period last year amid store closures.

Not-essential spending in January fell by 24.2%, with department store retailers witnessing a 36.8% sales slump while clothing sales were 25% lower.

Meanwhile, the report said that sales of essential items grew 3.9% as high demand for home deliveries sparked a 126.8% surge in online grocery spending.

Shoppers spent significantly less booking holidays in January, with a 87.2% fall in travel agent sales with airlines reporting an 81.6% fall amid travel restrictions.

Raheel Ahmed, head of consumer products at Barclaycard, said: “As the impact of the latest lockdown start to take its toll, we’ve seen particular sectors struggle, as physical premises across the UK were forced to close.

Last month’s glimmer of hope for the travel sector also seems to have stalled as tougher border controls saw bookings drop.

“Yet, on a more positive note, we have seen a surge in many online categories as the demand for home deliveries continues to rise.”