A stuttering start to 2020
Political uncertainty in recent months has instilled a “thrifty approach” among UK shoppers, leading to a slow start to 2020 for retailers.
This is according to the latest BRC (British Retail Consortium) and KPMG Retail Sales Monitor for January 2020. Total retail sales increased by 0.4 per cent in January, against an increase of 2.2 per cent in January last year.
This is above both the 12-month average drop of 0.2 per cent – a new record low since BRC-KPMG records began in 1995.
In January, UK retail sales were flat on a like-for-like basis from 2019, when they increased by 1.8 per cent compared with the previous year. Non-food retail sales declined by 3.3 per cent on a like-for-like basis in the three months to January 2020.
Online non-food sales increased by 2.5 per cent in January, against a growth of more than double (5.4 per cent) in January last year.
Helen Dickinson OBE, Chief Executive, British Retail Consortium, commented: “January saw a return to growth, however as sustainability continues to rise up the agenda, many customers are switching to more environmentally friendly products or simply choosing to buy less. These effects are not just limited to the high street as growth in online purchases also slowed.
“Across the UK, retailers are facing tighter margins as a result of weak consumer demand and increasing costs, including sky high business rates. We need to see a commitment from Government to bring down the overall burden of business rates in its upcoming review.”
Paul Martin, Partner, UK Head of Retail at KPMG, added: “Consumer confidence has started to return post-General Election, but we have not experienced any major leaps for the sector yet. We have to remember, this semi-positive performance will also be the result of aggressive discounts and consumers’ preoccupation with bagging a bargain. That’s not always good news when looking at bottom-lines.”