January shows positive retail growth amid tough trading month

January saw positive retail growth despite challenging market conditions, with like-for-like sales rising by 0.6% compared with the same period last year.

Helen Dickinson, CEO at the British Retail Consortium (BRC) said that the persisting tough trading environment played out at the start of the year with a “mixed set of trading updates”.

Against this challenging back-drop, 2018 “didn’t have a bad start” during what is traditionally a lean month, with sales creeping up in-line with the year’s average.

According to the BRC the figures continue to show divide between food and non-food sale, with rising food prices continuing to inflate sales growth and absorb the “lion’s share” of shoppers’ squeezed budgets. Meanwhile sales of non-food items struggled in January, dragging the 12-month average into negative territory for the first time in nine years.

Clothing however, bucked the winter trend for the non-food categories. Some retailers were able to scale back promotions, having shifted more of their stock during the festive sales than last year, and saw encouraging early demand for their new season ranges.

Paul Martin at KMPG, sponsors of BRC’s retail sales report, said: “January typically presents retailers with a tough gig persuading shoppers to spend in what is a cash-strapped month for most. With that in mind, 1.4% growth – or 0.6% on a like-for-like basis –  has to be seen as a success, albeit food sales continue to be the driver of this growth.”

Joanne Denney-Finch, CEO Institute of Grocery Distribution (IGD), said: “Food and grocery sales stayed resilient this month, maintaining the trend from 2017. This is in spite of the tradition in January for people to cut back on indulgences. From our research, 85% of shoppers claim to be trying to improve some aspect of their diet.

“Shoppers remain attracted by innovation and quality. 66% say they are sometimes tempted to pay extra for premium quality food and drink products.”