Wild weather and the cost-of-living crisis caused retailers to suffer a slow January, research finds.
Despite the traditional January sales, shoppers opted against splashing out on the high street, leading to retail sales rising by just 1.2% on the same time last year.
This is a huge drop in retail sales growth on January 2023, which grew by 4.2% compared to the previous year, according to the British Retail Consortium’s (BRC) data.
Sales between the period of 31 December 2023 and 27 January 2024 period were also below the 12-month average of 3.4%, as well as the three-month average growth (1.9%).
Food sales also took a hit in the three months to January, rising just 6.3% year on year (YOY), compared to 8.0% for the same period in 2023. The sales fell short of the 12-month average of 8.1% too.
Meanwhile, the picture didn’t look much brighter online, as non-food items decreased by 4.2% compared to last January, which was a fraction more (4.1%) in 2023.
Slow January for retailers follows a slump in December
This quiet spell for shoppers follows December’s shock decline in retail sales volumes, which experienced its largest monthly drop since Covid restrictions affected sales in January 2021.
Although the month kicked off well with discounts increasing footfall and the number of purchases for the first two weeks, other factors had too strong an impact.
Rail strikes, unpredictable weather, and the cost-of-living crisis have all contributed to a post-Christmas spending dip, according to industry experts.
‘Hangover of low consumer confidence remains’
Helen Dickinson, the BRC’s chief executive, said: “Easing inflation and weak consumer demand led retail sales growth to slow. While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month. Larger purchases, such as furniture, household appliances, and electricals, remained weak as the higher cost of living continued into its third year.
“The milder temperatures meant clothing sales performed poorly, particularly winter clothing and footwear. It was better news for health and beauty products, which continued to sell extremely well.”
Linda Ellett, head of consumer markets at accounting service KPMG, said: “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.”
Ellet added: “The extraordinary weather conditions across large parts of the country did little to encourage shoppers out onto the high street, whilst continued industrial action on the rail network was unhelpful for city centre locations.”
