Retail sales rise in January driven by higher food prices - BRC

UK retail sales crept up in January but the increase was due to rising food prices rather than increased demand for goods on the high street.

Like-for-like retail sales rose 0.6% last month from a year earlier, according to figures from the British Retail Consortium and KPMG.

In the three months to the end of January like-for-like food sales rose 2.9% but higher prices accounted for the extra spending. On the same basis non-food sales dropped 1.2% with sellers of furniture, clothes and shoes suffering the first fall since September 2009.

The figures show households continuing to spend more of their tightened budgets on food as the weakened pound pushes up prices, leaving them less to spend on other goods.

Helen Dickinson, the BRC's chief executive, said: “The figures paint the same old picture of divided fortunes for food and non-food sales. Rising food prices continued to inflate sales growth and absorb the lion’s share of shoppers’ squeezed budgets, while sales of non-food items struggled in January, dragging the 12-month average into negative territory for the first time in nine years."

The Bank of England expects wage growth to pick up as inflation eases but Dickinson said pressures would remain on retailers during 2018. She called on Brexit negotiators to agree a transition period to boost confidence in the economy.