January boosts retail sales growth

The value of January’s retail sales rose 2.3% on a like-for-like basis over the previous January, while sales overall were up 4.2%.

In January 2010 like-for-likes had fallen 0.7%, while total sales had increased 1.2%.

Pent-up demand after December’s snow, pre-VAT rise purchases and clearance bargains boosted non-food sales at the start of the month, but sales then fell back, hit by consumer caution.

The growth of non-food non-store sales – that is, sales over the internet and by mail order and phone – fell back in January after picking up in November and December. Nevertheless, sales were 12.3% higher than a year ago: in December they were 18% up.

Commenting on the figures, the British Retail Consortium’s director general, Stephen Robertson, said: “On the surface, this is the best sales growth since last March, but that’s not the whole story. Comparisons are with a feeble, snow-hit performance a year ago. Growth this January was driven by a relatively short but strong burst of non-food buying early in the month. Clearance discounts and a last chance to beat the VAT rise got people buying things like furniture and electricals in the first few days.

“Later in the month sales of non-food goods slowed, particularly for bigger items, as the reality of worries about jobs and personal finances returned to customers’ minds.”

He added: “Online sales grew nearly three times faster than store sales and the gradual, underlying shift towards online retailing continues.”

Home accessories and textiles picked up to show year-on-year gains after two months of declines. Kitchenware, lighting and floorcare all did well, and clearance sales and the cold weather boosted bedding, linens and furnishings.

However, consumer uncertainty continued to favour essentials over discretionary and decorative items.