January Retail Sales 2007

 

UK retail sales were up 3.1% on a like for like basis compared with January 2006 when sales had risen only 0.2% after a strong Christmas.

 

The continued growth of retail space influenced the three month trend of growth as December saw an increase of 2.1% from 1.9% for like-for-like sales and to 4.1% from 4.0% for total sales.

 

Retail sales growth (per cent)

 

The underlying growth in retail sales volume slowed in January as sales fell back after a strong December but remained robust when compared with the long-run average. The volume of retail sales in the three months was 0.9% higher than in the previous three months.

 

The average weekly value of sales in January was £4.4billion, 2.8% higher than January 2006.  Clearance sales achieved strong growth but often at the expense of margins.  Consumer confidence has weakened since Christmas and discounts are still a big driver of sales.

 

Kevin Hawkins, Director General, BRC commented, “The momentum which built up in December has carried through into the new year and this is the best January report for three years. It comes, however, with a strong note of caution. Much of the growth has been driven by the grocery sector and discounting has been fairly widespread in several other categories. The comparatives from last year are weak and the November and January interest rate increases have yet to make themselves felt. No-one should start clamouring for another rate rise on the basis of these figures.”

 

 

 

 

Helen Dickinson, Head of Retail, KPMG added, “Not a bad set of results on the face of it, with like-for-like sales in January being 3.1%, the highest monthly increase since July 2006.  However, it merely reflects the continuation of the trend which we saw in December, whereby it was only strong sales late in that month that gave many retailers something to cheer about over Christmas.  It also comes on the back of a weak performance in January 2006.  Many retailers will remain preoccupied with how to address store overheads, which are rising at a faster pace than their like-for-like sales.”

 

Sector Performance

 

Food and drink

Sales growth was the best since last July’s gain which was driven by the heatwave.  There were significant gains in premium and organic lines while New Years resolutions and health promotions benefited fresh fruit, vegetables, salads and poultry.  Beers, wines and spirits showed slower growth after a Christmas boost.

 

Clothing

Clothing sales were slightly down on a year ago, worse than in December but not as bad as in November.  Womenswear was the weakest since June 2006 and showed no growth compared to a year ago.  Menswear sales levels also slowed but childrenswear fell further below year earlier levels.

 

Footwear

Following November’s sharp decline, sales growth edged up further however the increase was against a sharp fall in January 2006.

 

Electrical & Electronic

Little changed within this sector as sales patterns remained mixed.  With many consumers discounting heavily, flat screen LCD TV’s remained big sellers however growth was slow in comparison to 2006.

 

Department Stores

Growth was mixed with some stores resorting to heavy discounts to achieve clearance particularly on home and leisure.

 

DIY / Gardening

Discounts drove good sales of showroom kitchen and bathroom which in turn benefited tiling, flooring and decorating.  Power and hand tools struggled but garden tools and lawnmowers benefited from the mild weather.

 

Homewares

Clearance markdowns helped home accessories remain strong but despite good sales of curtains and linens, textiles slowed.  The cold snap and discounts benefited duvets and bedding.

 

Furniture & Carpets

Against a strong January 06, sales declined to their lowest since mid 2006.  Some gains were seen by bed and bedroom furniture but sofa’s, lounge and fitted kitchens were largely dependent on discounts.

 

Chemist & Beauty

After a stroing December, toiletries and cosmetics slowed.  Beauty products sold well in the sales but fragrance was weaker.

 

Leisure goods

Albums and DVD sales struggled with weaker new releases than a year ago.  Sales on books levelled out after a good December.  Computer games remained popular.

 

Mail Order

Sales showed some growth but this reflected heavy discounts on winter stock.