Perfect storm of rising costs to hit retail return
Total retail sales jumped 7.5 per cent during January compared to the same month in 2020.
However, retail bosses have warned consumers and firms face a challenging few months ahead with a perfect storm of rising costs.
Shoppers were less eager to buy non-food items in stores over the three months to January, compared to the equivalent period just before the pandemic struck.
In-store sales of non-food items declined 7.5 per cent on a total basis, according to the British Retail Consortium and KPMG’s retail sales monitor. This was worse than the 2019 total average decline of 3.1 per cent.
However, online non-food sales soared last month, up 31.8 per cent on 2020 levels.
Helen Dickinson OBE, BRC chief executive, said food sales were “more muted” in January compared to the months prior, thanks to pent-up demand for dining out.
“Consumers prioritised home purchases, boosting the sale of household appliances, electronics and homeware. In what may be signs of a return to pre-pandemic trends, furniture was the stand-out performer in January, after transport delays in the Christmas period began to ease,” she added.
“Retailers and consumers face challenges in the coming months. Retailers face competition from other spending opportunities as the public flood back to restaurants, cafes and live events. Furthermore, rising inflation, driven by higher costs of production, higher energy and transport prices, as well as other looming price hikes this spring will mean consumers will have to tighten their purse strings.”
Separately, the latest Ipsos weekly footfall data for London and the South East for the week 31 January to Sunday 7 February showed a week-on-week dip. Footfall was down 1.3 per cent on the week prior and down 29 per cent on 2019 levels.