UK high street sales stagnant amid January retail gloom

Consumer spending squeeze blamed for 0.1% rise with only gym kit and toys increasing. January was a tough month for high street retailers as sales rose just 0.1%, far below City expectations, as higher prices continued to deter shoppers from spending.

City analysts had expected a recovery of around 0.5% last month, after the unexpectedly sharp fall of 1.4% in December. The figures from the Office for National Statistics (ONS) indicate a pick up in year-on-year growth to 1.6% in January, from 1.5% in December, but analysts had hoped for a bigger turnaround after a very disappointing end to last year.

Food sales fell again – down 0.9% in volume terms on December – but that was offset by a rise in sales of gym kit and children’s toys.

Rhian Murphy, ONS senior statistician, said: “Retail sales growth was broadly flat at the beginning of the new year with the longer-term picture showing a continued slowdown in the sector. This can partly be attributed to a background of generally rising prices.”

She said there had been a 0.9% decline in the volume of food compared with January 2017 while non-food rose 2.6%, led by sports equipment, games and toys. An uplift in sales of gym kit as consumers resolved to get fit and lose weight contributed to a year-on-year rise.

It was the sixth consecutive month of decline in the volume of food sold.

Jeremy Cook, chief economist at WorldFirst, said: “Who’d be a retailer right now? The ONS sees the longer-term picture for the retail sector as in a “continued slowdown and the average British consumer is looking at real wage declines, higher borrowing costs, and record levels of consumer debt.”

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