Despite the Christmas sales which boosted the UK’s fashion retailers, January saw the lowest sales growth in fifteen years. UK retail sales values fell 0.7 per cent on a like-for-like basis from January 2009, when sales had risen 1.1 per cent. On a total basis, sales rose 1.2 per cent against a 3.2 per cent increase in January 2009. The snow and terrible weather hit the retail sector, especially discretionary items. Over the month, clothing and footwear showed gains on a year ago, but other sectors, like homewares and furniture showed declines.
Stephen Robertson, Director General, British Retail Consortium, said: “An awful start to the year and in stark contrast to an upbeat December. This is the worst January sales growth in the fifteen years we’ve been running the survey. It was a month of two halves with a focus on must-haves early on. The coldest January since 1987 boosted food sales at the start of the month, as shoppers stocked up. But food sales growth melted with the snow. The month as a whole was significantly weaker than December. Most non-food sectors had a poor start, though nearly all recovered towards the end of the month. Furniture and DIY were worst hit as customers put off buying non-essentials. The VAT change brought some sales forward to December, but customers are becoming cautious again in the face of economic and political uncertainty. Retailers will be hoping these results are mainly a snow induced blip, rather than an indication of further difficulties.”
Helen Dickinson, Head of Retail, KPMG, said: “A very mixed performance in January which was impacted by a number of factors. The snow in the early part of the month caused consumers to stock up on food related items as travelling the country became treacherous while non-food suffered. As the month progressed, clothing and footwear picked up considerably but other non- food sectors continued to show weakness. Although the results were flattered by the impact of higher shop prices, given the higher VAT rate in January 2010 compared to January 2009, this was less pronounced than in December. The underlying trend is difficult to read but there is no doubt that the strong sales we saw in December 2009 are not indicative of the trend for the rest of this year.”
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