UK retail sales start new year on back foot

According to the latest BRC-KPMG Retail Sales Monitor, total sales rose 4.2% year-on-year in January, or by 3.9% on a like-for-like basis.

It was a marked slowdown on January 2022, when retail sales strengthened 11.9% on both a total and like-for-like sales basis. It was also down on December, when total sales rose 6.9% and underlying sales by 6.5%.

Helen Dickinson, chief executive of the British Retail Consortium, said: "As Christmas cheer subsided, retailers felt the January blues as sales growth slowed.

"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.

"The coming months will continue to be challenging for retailers and their customers. Consumer confidence remains stubbornly low and looming rises in household bills and mortgages mean discretionary spending will remain weak."

Food sales increased 7.9% in the three months to January on a like-for-like basis, while non-food sales rose 2.9%.

Paul Martin, UK head of retail at KPMG, said: "With inflation running at around 10%, sales growth for January nearly halved in comparison to January, sending a clear signal that consumers have started the year with a tight rein on spending as they face another period of rising costs.

"Sales of clothing continued to prop up the high street, with men’s clothes and shoes the strongest category in January, while purchases of energy efficient appliances remained a top purchase."

Susan Barratt, chief executive at IGD, said: "At first glance, food and drink sales look uncharacteristically strong, but in fact the typical slow start to the year has been heavily disguised by a big dose of inflation.

"After a slightly more buoyant December, it’s clear that volumes fell in January as shoppers put the post festive brakes on their spending."