Retail sales rise at slowest pace since May - BRC

Retail sales rose in January at the slowest pace since the depths of the first Covid-19 lockdown as non-essential spending was hit by consumer concerns, the British Retail Consortium said.

Total retail sales fell 1.3% in January as like-for-like sales rose 7.1% from a year earlier. In the three months to January, in-store sales of non-food items dropped 36.5% and by 20% on a like-for-like basis. Food sales rose 7.5% on a like-for-like basis and 7.9% overall.

Over the same three months, total non-food sales dropped 5.6% and like-for-like sales rose 5.6%. Online non-food sales rose 83% in January, the highest growth on record, compared with just 1% a year earlier, as computer sales shot up with children off school. Clothing sales continued to decline with physical sales down across categories.

Helen Dickinson, the BRC's chief executive, said: "January saw retail sales growth decline to its lowest level since May of last year. The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending – especially on clothing and footwear."

The survey shows the different impact of the crisis on physical shops compared with online sales, which have boomed, in what commentators say will be a permanent shift to shopping from home. So much so that the government is reported to be considering a tax on online sales to redress the balance between e-commerce operators such as Amazon and struggling physical shops.

Paul Martin, KPMG's UK head of retail, said: "With much of the UK in lockdown for the foreseeable weeks, conditions for retailers will continue to be incredibly challenging. On the one side dealing with a continued increase in online demand versus subdued demand on the high street - and overall in many cases, thinner margins and rising logistics costs and complexities post-Brexit."