Re­tail sales suf­fer slow­est fes­tive rise in seven years as public’s belts tighten

Belfast Telegraph - Business Telegraph - - News - BY KALYEENA MAKORTOFF

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.

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