Retailers endure worst January since 2013

RETAILERS had a disappointing January as shoppers resisted the temptations of the sales to tighten their belts instead – quite literally, cutting down food spending but increasingly snapping up sports clothing.

Sales volumes rose by 1.6pc on the year, falling well short of predictions of a more solid 2.5pc rise.

This represents the weakest January sales growth since 2013, according to data from the Office for National Statistics. Health concerns loomed particularly large in the sales figures.

“Growth in the quantity of sporting equipment, games and toys being bought was offset by falling food sales when compared with the same month a year earlier,” said Rhian Murphy, ONS senior statistician. “Sporting equipment sales have grown more than usual in January following an increased uptake for gym wear.”

Food sales fell by 0.9pc on the year, while the sports equipment, games and toys category increased by 10.9pc. Retailers told the ONS that new year’s resolutions increasingly focused on the aim of getting fit and losing weight.

Rising food prices are in large part to blame for the sixth consecutive monthly fall, with inflation across all products denting households’ spending power. While the amount of goods customers took home rose by 1.6pc on the year, the amount spent to buy them rose by 4.4pc. This comes at a time of weak pay growth, putting the squeeze on families.

The latest data show weekly earnings climbed 2.5pc in the 12 months to November, while inflation stood at 3pc in the year to January. The weak retail growth figures indicate this is weighing on the economy.

“Consumer confidence remains depressed, despite some recent improvement, and disposable incomes look set to remain under pressure,” said economist James Smith at ING.