Spending by shoppers at British retailers grew less quickly in January but the overall picture looked a bit brighter as consumers treated themselves to cinema trips and booked holidays, surveys showed today (7).
British Retail Consortium (BRC) said spending in store chains rose by 4.2 per cent in annual terms in January, weaker than December's 6.9 per cent rise and lagging behind inflation which signified a fall in sales volumes.
"As we head into a difficult time for consumers, the short-term outlook for the retail sector remains challenging," Paul Martin, UK head of retail at KPMG which co-produces the figures, said.
"With the latest interest rate rise and utility price increases heading our way, shrinking household incomes means we will continue to see a shift in what consumers buy and where they buy from."
“As Christmas cheer subsided, retailers felt the January blues as sales growth slowed,” The Guardian quoted Helen Dickinson, the chief executive of the BRC, as saying.
“Many retailers discounted heavily to entice consumer spend, and while there were bargains to be had in the January sales, retailers continue to be hit by lower margins and falling volumes. Own-brand ranges remain popular across food and non-food products, and big-ticket items are seeing customers trade down.”
The annual rate of inflation fell back in December to 10.5 per cent, down from a peak of just over 11 per cent in October, although still remains at the highest level since 1982.
“Consumer confidence remains stubbornly low and looming rises in household bills and mortgages mean discretionary spending will remain weak,” Dickinson said.
Separate figures from Barclays showed consumer card spending grew 9.7 per cent in January compared with the same month a year earlier, a period when concerns over the Covid Omicron variant led many people to stay way from the shops and hospitality venues.
Barclay's snapshot showed a sharp increase in bookings for the travel sector as holidaymakers geared up for getaways later this year. Spending with travel agents and airlines rose by more than three-quarters compared with a year ago, while there was also an increase in spending on domestic holidays.
