UK retail sales saw a slump in January, falling 0.6 per cent on a like-for-like basis.
The BRC-KPMG Retail Sales Monitor revealed this drop in sales (food and non-food) compared with a 2.6 per cent increase in January 2016.
However, on a total basis, sales rose 0.1 per cent in January, but this is compared with a 3.3 per cent increase in the same month last year.
Over the three months to January, non-food sales rose by 0.2 per cent on a like-for-like basis and 0.3 per cent on a total basis. This was below the three-month average of 0.8 per cent, which is the lowest since July 2012.
Meanwhile, the BRC-KPMG Online Retail Sales Monitor showed that online sales continued to dominate with an eight per cent increase of non-food sales in January.
Over the three months to January, online non-food sales grew by 8.6 per cent, and increased 9.5 per cent on a 12-average basis.
Online sales represented 22.9 per cent of total non-food sales in the UK in the month, compared with 21.6 per cent in January last year.
On a three-month basis, online accounted for 24.9 per cent of sales.
However, in the same three months, in-store sales fell by 2.2 per cent on a total basis and 2.4 per cent on a like-for-like basis, which is the deepest decline recorded since the online monitor began in December 2012.
British Retail Consortium chief executive Helen Dickinson said: “Online channels achieved the highest share of total non-food retail spend on record in the three months to January, despite the eight per cent growth being somewhat below the trend of late. In fact, the rolling 12-month average growth to January 2017 is the lowest since the monitor began in 2012, falling below double-digits for the first time.
“As with total sales, online sales in January were set against a strong comparative period, as January 2016 recorded the highest growth of last year. However, with £1 in every £4 of non-food spending being spent online consistently over the past three months, this provided enough momentum to largely shield online growth from the slowdown of non-food sales overall. It was stores that bore the brunt of the slowdown; posting their deepest three-month decline on record as the demand during retailers’ clearance sales was predominantly online.
“As the clearance events came to an end, full-price items didn’t attract the same demand, echoing a sense of caution from consumers and ultimately resulting in a quiet end to the month for many retailers.”
Paul Martin, UK head of retail at KPMG, added: “Unlike the chilly high street, online retail sales continued to grow in January, with non-food online sales up eight per cent compared to last year. The month’s cold snap is likely to have encouraged high street hibernation, with shoppers preferring to browse from the comfort of their own homes.
“Indeed, consumer focus really did turn indoors during the month, with sales of furniture and other household items performing particularly well.
“Online retail channels will continue to grow in popularity, and with increased pricing pinching the consumer purse, retailers will need to balance price, personalisation and customer experience seamlessly in order to grab the attention of their customers.”
Patrick Munden, global head of retail at Salmon, concluded: “News that sales last month slipped highlights the change in consumer shopping patterns, and that January is no longer the peak shopping period it once was. In previous years, January would see strong sales thanks to retailers holding off discounts until after Christmas and during the January sales. Now however, with the emergence of Black Friday, Cyber Monday and the subsequent sales weeks in the run-up to Christmas, we have seen the development of a much longer sales period, reducing the need for shoppers to maximise their efforts in the January sales.”