Slow start for retail sector with subdued sales growth in January

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A woman walks past a sale sign on a branch of H&M on Oxford Street in London, Britain, January 17, 2020. REUTERS/Toby Melville

Retail sector experienced a stuttering start to the year, with like for like sales (LFL) remaining flat in January, against an increase of 1.8 percent in January 2019.

Sales increased by 0.4 percent on a total basis, much lower than 2.2 percent jump in January 2019. However, this figure is above both the 3-month and 12-month average declines of 0.4 percent and 0.2 percent respectively, according to BRC data.

“January saw a return to growth, however recent political uncertainty and a decade of austerity appear to have ingrained a more thrifty approach to shopping among consumers,” commented Helen Dickinson, chief executive of the British Retail Consortium (BRC).

Over the three months to January, food sales saw a decrease of 0.1 percent on an LFL basis, but increased 0.6 percent on a total basis. This is below the 12-month total average growth of 1.2 percent, the lowest since February 2017.

During the three months to December, food sales were flat on an LFL basis and increased 0.7 percent on a total basis.

Susan Barratt, chief executive of IGD, said growth in food and drink sales has not yet recovered momentum.

“Even with January being a typically ‘slow’ month, the start to 2020 has proven to be especially disappointing with sales growth falling behind previous years,” Barratt said.

“Moving into February retailers will be looking to drive some excitement around the first major ‘event’ of the year with St Valentine’s Day falling helpfully on a Friday this year.”