Retail sales suffer slowest festive rise in seven years as public’s belts tighten
RETAILERS suffered the slowest growth in festive sales since 2009 over the three months to January — the latest sign that consumer spending may be starting to wane.
The latest British Retail Consortium (BRC)-KPMG survey shows that sales grew 1.1% between November and January, down from 1.6% during the same period last year.
BRC chief executive Helen Dickinson said: “Looking across the last three months, we’ve seen the slowest growth of the festive period since 2009.
“Closer inspection reveals that this was driven by slowing sales in non-food sectors.”
Food sales over the three-month period rose 2% compared to 0.2% a year earlier, but was short of compensating for the drop in non-food sales from 2.8% to 0.3%.
When accounting for January alone, like-for-like sales dropped 0.6% on an annual basis, after rising 2.6% during the first month of 2016.
Sales grew 0.1% on a total basis last month, but that was against a 3.3% surge in January 2016 and falls below the 12-month average of 0.9% and the three-month average of 1.1%.
That is despite stronger furniture sales and a boost from Chinese New Year shoppers, Ms Dickinson said. “These figures suggest that ‘caution’ was top of new year shopping lists and the uptick in credit card lending at the end of the last year may be short-lived.
“With the signs pointing to upward pressures on shop prices given rising import costs, all eyes will be on the impact of inflation on consumer spending.”
The Bank of England is forecasting a 2.7% jump in shop prices by year-end, peaking at 2.8% in the first half of 2018, before easing slightly to 2.6% at the end of next year and 2.4% in 2019.
It follows a significant weakening in the pound, which has fallen nearly 18% against the US dollar and 10% against the euro since the Brexit referendum, increasing the cost of imports.