UK retail sales growth slows to 17-month low in January, BRC data shows

(Sharecast News) - The annual rate of UK retail sales growth slowed to its lowest level in 17 months in January as non-food sales dropped despite an easing of inflationary price pressures. Total retail sales were up by just 1.2% compared with January 2023, easing from the 1.7% year-on-year growth registered in December and the 2.7% annual increase seen in November, according to the British Retail Consortium-KPMG Retail Sales Monitor.

The last time year-on-year growth was below this level was in August 2022 when it was just 1.0%.

"Easing inflation and weak consumer demand led retail sales growth to slow. While the January sales helped to boost spending in the first two weeks, this did not sustain throughout the month," said the BRC's chief executive Helen Dickinson.

"Larger purchases, such as furniture, household appliances, and electricals, remained weak as the higher cost of living continued into its third year," Dickinson said.

"The milder temperatures meant clothing sales performed poorly, particularly winter clothing and footwear. It was better news for health and beauty products, which continued to sell extremely well."

Food sales were up 6.3% year-on-year over the three months to January, slowing from 6.8% growth registered in the three months to December, while non-food sales fell 1.8% compared with a 1.5% decline previously.

Dickinson called on the government to prioritise the needs of retailers and their customers ahead of the Spring Budget and the next general election expected at some point in the second half of 2024.

"Employing three million people and supporting families and communities in every corner of the country, retail is the 'everywhere economy'. By addressing the cumulative burdens, from business rates' rises, to ill-conceived new recycling proposals to border control costs, the next government can unlock retail investment and boost local and national economic growth."