January sales best since May but could be a blip
Retailers saw a surprise rise in sales last month as heavy discounting drove the best performance on the UK high street since May, figures revealed yesterday.
The value of sales increased 1.1% on a like-for-like basis in January compared to a year ago, which also marked the first rise for three months, according to the British Retail Consortium (BRC).
Its latest BRC/KPMG Retail Sales Monitor showed comparable food sales surged 5.1% and while non-food slipped 1.6%, the fall was still far lower than the falls seen in recent months.
The news comes just a week after Halifax revealed an unexpected 1.9% hike in house prices last month in what was seen as a glimmer of hope for the country’s battered economy.
The BRC said yesterday’s retail figures “gave room for optimism”, but was quick to warn that the rise in January sales could just be a short-lived blip.
Sales growth weakened towards the end of the month after an initial boost and the figures were also driven by food price rises.
Helen Dickinson, KPMG head of retail, said: “The figures don’t mean consumer confidence has returned.
“The results are heavily skewed by food prices creeping back up again after the heavy promotional activity in December and by a reasonably strong performance in the first week of the month, caused by the continuation of a short-lived pick up in spending immediately after Christmas which ended by the second week."
“The outlook for many retailers, and the industry as a whole, remains challenging.”
The increasing trend to shop online helped maintain strong non-food internet sales growth, up 19% in January.
However, sales in clothing, footwear, homewares and health and beauty remained down on January 2008.
The food and drink sector enjoyed its best growth since June, thanks in part to higher prices, but also a willingness for shoppers to continue splashing out on food and drink despite the recession.