Retail sales slow as high cost of living enters third year

Easing inflation and weak consumer demand led retail sales growth to slow during January.

According to the latest BRC-KPMG Retail Sales Monitor for January 2024, UK Total retail sales increased by 1.2% year on year in January, against a growth of 4.2% in January 2023. This was above the 3-month average growth of 1.9% and below the 12-month average growth of 3.4%.

Food sales increased 6.3% year on year over the three months to January, against a growth of 8.0% in January 2023. This is below the 12-month average growth of 8.1%. For the month of January, Food was in growth year-on-year.

Non-Food sales decreased 1.8% year on year over the three-months to January, against a growth of 2.9% in January 2023. This is steeper than the 12-month average decline of 0.5%. For the month of January, Non-Food was in decline year-on-year.

Over the three months to January, In-store Non-Food sales decreased 1.5% year on year, against a growth of 7.2% in January 2023. This is below the 12-month average growth of 0.8%.

Online Non-Food sales decreased by 4.2% year on year in January, against a decline of 4.1% in January 2023. This was steeper than the 3-month decline of 2.3% and the 12-month decline of 2.8%.

The proportion of Non-Food items bought online (penetration rate) decreased to 35.0% in January from 35.4% in January 2023.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month. Larger purchases, such as furniture, household appliances, and electricals, remained weak as the higher cost of living continued into its third year. The milder temperatures meant clothing sales performed poorly, particularly winter clothing and footwear. It was better news for health and beauty products, which continued to sell extremely well.

“With the Spring Budget in sight, and a general election looming, government cannot afford to ignore the needs of retailers and their customers. Employing three million people and supporting families and communities in every corner of the country, retail is the ‘everywhere economy’. By addressing the cumulative burdens, from business rates’ rises, to ill-conceived new recycling proposals to border control costs, the next government can unlock retail investment and boost local and national economic growth.”

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