January 2015 saw UK retail sales continue to grow, with a 1.6% increase in total, compared to January last year. Food sales grew for the second consecutive month, while online sales of non-food products grew 11.7%. Non-food online saw an increase of 18.4%, up from 16.8% compared to January last year.
Helen Dickinson, Director General, British Retail Consortium, said: "Retail sales have continued to grow with January reporting a respectable 1.6 per cent increase. Looking into the numbers a little more closely gives us even more cause for optimism - last year retailers had a bumper January so to see growth against such a tough comparison shows the industry to be in rude health. Customers were offered attractive bargains on winter ranges but it remains to be seen at what cost to the retailers’ margins.
"Shoppers were in the mood to buy products aimed at helping them lead a healthier lifestyle - from fruit and veg to exercise equipment, all these kinds of products have been selling strongly. Given the time of year this is no surprise and retailers have capitalised by making sure they have the right stock, at the right price to help consumers achieve their New Year goals."
David McCorquodale, Head of Retail, KPMG, said: "After a subdued December, retailers experienced a semi-revival in fortunes as shoppers took advantage of the bargains on offer in the January sales. The clothing, toys and household appliances sectors particularly benefitted from this spending spree, notching up year-on-year growth against tough comparables from the year before.
"These figures clearly demonstrate the difficult cycle that retailers are trapped in. Demand is now almost solely driven by discounts, with shoppers very reluctant to buy goods at full price in the hope that yet another sale could be just around the corner. This promotion-led environment risks becoming the new normal: retailers are struggling to persuade consumers to break the habit and go back to the traditional sales cycle.
"The grocery sector saw its first growth in three-month average total sales since the first half of last year – an encouraging sign from the battlefield. With consumers benefitting from lower fuel and petrol prices, retailers are fighting for their share of these savings.
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: "The year started promisingly for food and drinks sales, with year-on-year growth in every week during January – the first time this has happened since February 2014.
"The sector is at last seeing modest benefit from the recovering economy and confidence is growing. IGD’s ShopperVista research shows that over a fifth of shoppers expect to be better off in 2015, the highest since we began tracking this in September 2010. Shopper confidence is being boosted by lower fuel and grocery prices. A record 23% expect food prices to fall further this year and interest in quality is building, with a quarter of people now prioritising this when shopping for food and drink."
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The February 2015 Monitor, covering the four weeks 1 February – 28 February, will be released at 00.01am Tuesday 10 March 2015.
The data is collected and collated for the BRC by KPMG.
The British Retail Consortium (BRC) is the UK's leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based.
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.