Exercising craze fails to help unfit retailers
PUMPED up spending on gym wear and fitness equipment could not prevent UK retail sales sagging in January.
Concerns mounted that cash-strapped consumers will struggle to power economic growth after official figures showed sales volumes edging up by just 0.1 per cent from the previous month, when they declined by 1.4 per cent.
This was well below economists’ forecasts of 0.5 per cent growth, while the 1.6 per cent year-on-year improvement also undershot predictions.
Shoppers’ budgets have been squeezed as wage growth has struggled to keep pace with 3 per cent inflation.
The Office for National Statistics data showed a 0.4 per cent drop in food sales volumes from the previous month and a 0.9 per cent year-on-year decline, reflecting higher prices.
Non-food sales increased 0.7 per cent from December, while resolutions “to get fit” contributed to a 10.9 per cent jump in sports equipment, games and toys sales compared with the previous year.
ONS’s Rhian Murphy said: “Retail sales growth was broadly flat at the beginning of the new year with the longer term picture showing a continued slowdown. This can partly be attributed to rising prices. Sporting equipment sales have grown more than usual in January 2018, following an uptake for gym wear.” The retail sector contributes about £200billion to UK economic output, more than 11 per cent of the total.
But economists said depressed sales volumes, added to weaker purchasing managers’ surveys of manufacturing, construction and services sectors, could see first-quarter economic growth slipping from the 0.5 per cent achieved over the previous three months.
Richard Lim, chief executive at Retail Economics said: “Following profit warnings and job cuts, these figures confirm a terrible start to the year for retailers. Indeed, the worst January since 2013.
“Inflation has proved stickier than expected, remaining at high levels for many households. Against a backdrop of soft consumer demand and shifting consumer behaviour towards online and the experience economy, we expect many retailers are under intense pressure.”