‘Lacklustre’ January for retailers as cost-of-living pressures enter third year

Retailers suffered a lacklustre January as consumers began a third year grappling with cost-of-living pressures, new figures show.

Easing inflation and weak consumer demand saw total UK retail sales from 31 December 2023 to 27 January 2024 rise by just 1.2%, a plunge from the year-on-year growth of 4.2% seen in the same month in 2023, according to the BRC-KPMG Retail Sales Monitor.

Food sales were up 6.3% year-on-year, compared with growth of 8% last January.

Meanwhile, non-food sales fell by 1.8% year-on-year over the three months to January, against growth of 2.9% in January 2023.

Helen Dickinson, CEO of British Retail Consortium, said: "While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month.

"It was better news for health and beauty products, which continued to sell extremely well. However, the milder temperatures meant larger purchases and clothing sales performed poorly."

Linda Ellett, UK Head of Consumer Markets, Leisure & Retail at KPMG, added: "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.

"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."