BRC reported that UK total retail sales, increased by 1.2% year-on-year in January, against a growth of 4.2% in January 2023. This was below the three-month average growth of 1.9% and below the 12-month average growth of 3.4%.

While, non-food sales, which includes clothing sales, decreased 1.8% year-on-year over the three months to January, against a growth of 2.9% in January 2023.

BRC noted this to be steeper than the 12-month average decline of 0.5%. For the month of January, Non-Food was in decline year-on-year.

During the three-month period leading up to January, in-store non-food sales experienced a 1.5% year-on-year decline, contrasting with a 7.2% growth recorded in January 2023.

This figure falls short of the 12-month average growth rate of 0.8%.

In January, online non-food sales saw a year-on-year decrease of 4.2% compared to a 4.1% decline in January 2023. This decline was more pronounced than the three-month decrease of 2.3% and the 12-month decline of 2.8%.

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By GlobalData

Based on data from BRC, the proportion of non-food items bought online (penetration rate) dipped to 35.0% in January, down from 35.4% in January 2023.

Dickinson pointed out that easing inflation and weak consumer demand led retail sales growth to slow, while the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month.

She continued: “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.”

Linda Ellett, UK head of consumer markets, leisure & retail at KPMG, echoed the same sentiments. She believes it may be a new year, but the “hangover of low consumer confidence” remains, with retail sales growing by a lacklustre 1.7% on the high street, and online operators seeing yet another month of negative sales performance.

Ellett said: “Health and beauty purchasing continued to drive sales both on the high street and online, whilst sun seekers and consumers with healthy resolutions front of mind, gave a boost to sports and travel equipment sales, which were up over 4% year on year.

“The extraordinary weather conditions across large parts of the country did little to encourage shoppers out on to the high street, whilst continued industrial action on the rail network was unhelpful for city centre locations. Whilst there are some positive signs that mortgage rates are starting to fall and stabilise, and shop inflation has fallen to its lowest level in over a year, the feel good factor has yet to materialise at the tills. 

“It remains a difficult environment for retailers facing into significant downward pressures on demand, a strong promotional environment and uncertainty hitting supply chains due to rising geopolitical tensions.  Retailers will be hoping that continued good news on the economy, coupled with the small boost given to some consumers as cuts in national insurance start to feed through to pay packets, will boost confidence and convert to sales.  With increases in labour costs and business rates around the corner, retailers will be hoping for good news in the Chancellors’ upcoming Budget to give consumers that lift they need to start spending again.”

Sarah Bradbury, CEO of IGD, highlighted that households have had to be mindful with their spending in January with nearly a third of households with children at home claimed to have bought on credit over Christmas.

Bradbury added: “So some households – particularly less affluent ones – will likely cut back a little to pay off this festive spending. While wage growth is now ahead of inflation, it will be some time before real incomes recover to their pre-crisis levels and consumer spending fully recovers.”

Last April, at the Union of Shop, Distributive and Allied Workers (USDAW) conference in Blackpool, Dickinson said the physical retail sector is facing more challenges than ever before but it will continue to play a “vital” role in communities.