British retailers enjoy strongest sales growth since 2010

Tuesday, 11 February 2014
UK retail sales recovered last month, after what was for many retailers a disappointing December, to reach the strongest growth rate recorded since March 2010, according to industry data published on Tuesday. The British Retail Consortium-KPMG retail sales monitor for January 2014 revealed that  the total amount spend in stores the past month grew 5.4 percent against a 3 percent growth from the same period last year. British retail sales were up 3.9 percent on a like-for-like basis from January 2013, an improvement from 0.4 percent increase recorded in December.

Retail sales growth for both a total and a like-for-like basis were the highest reported since April 2011, when the figures were boosted by the timing of Easter. However, ignoring the seasonal factor, the total retail sales growth was the highest recorded since March 2010 commented the BRC. The 3 month average total growth for retail sales was 3.2 percent, which is in line with the 12 month trend recorded by the BRC and KPMG, now at 3 percent.

Strong consumer demand drives up retail sales for January

The data suggests an ongoing powerful consumer demand for retail goods, which in turn is helping the country's economic recovery and growth, in spite of price inflation increasing more rapidly than British household wages.

Helen Dickinson, director general at the BRC commented: "Our figures for January show strong growth but a story of two halves. With a record number of people now in work and the continued recovery in the housing market we have seen very strong performances in furniture and other non-food items."

"These figures are better than expected given the continued squeeze on personal finances but official figures show that this is not built on personal debt which remains below pre-recession levels," added Dickinson. Furniture was highlighted as the top performance category for retail sales, reaching its best growth rate since April 2006. However, other non-food sales, such as clothing and footwear were also key contributors to the overall growth.

The BRC retail sales monitor also indicated that January is a transitional month for fashion and clothing sales, which is driven by discounting and new spring collections being released. The data shows that last month both aspects came together in a successful way, sales lured shoppers into stores who then also purchases new collection ranges at full price.

"Customers responded enthusiastically to a range of sales and promotions on non-food items this January. Retailers succeeded in tempting shoppers in with promotions, they also saw strong demand across new ranges, helped by improvements in consumer confidence," said Dickinson.

Mild weather also help boost non-food retail sales in January

The mild weather also plays a role in clothing sales, as the heavy rainfall kept shoppers away in December, in January there was a good demand for blouses, nightwear and women's accessories over winter garments. Despite the mild weather that hit January on the other hand, footwear sales were strong, with an ongoing demand for boots as well as slippers.

David McCorquodale, head of retail at KPMG commented: "In non-food, there were a number of factors at play, all of which helped to boost sales. The weather in January 2014 was wet and windy but not, from a retail point of view, disruptive, snowy and cold like last year."

McCorquodale believes that the data highlights a good start to the new year for retailers. He adds: "The early weeks of the month reflected strong growth in clothing and other non-food, hinting that post-Christmas sales campaigns had boosted the top line: only time will tell at what cost to the bottom line."

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