January Sales Give Retailers Surprise Boost
Retail sales in January this year were higher than in the same period in 2008, after businesses cut prices to encourage consumers to keep spending, according to the British Retail Consortium (BRC).
The BRC’s monthly retail sales monitor revealed that, despite the recession, shop sales increased by 1.1 per cent on January 2008 – taking industry analysts unawares.
“These figures are surprising considering people are currently reining in their spending,” said BRC spokesman Krishan Rama. “But although there may be some room for optimism, it may just be a blip due to discounting.
“The fundamentals haven’t changed – job fears are mounting and consumer confidence is at record lows,” he added.
The BRC research also found food sales increased by 5.1 per cent in January on the same period last year, while non-food sales slipped by 1.6 per cent.
“Food is the only sector to have shown consistent growth in recent times and this is likely to continue,” said Rama. “Non-food sales were down on a year ago, though by less than December. January clearance deals may have released pent-up demand and customers started to spend on goods they’ve been intending to buy for months.”
The Institute of Grocery Distribution’s chief executive Joanne Denney-Finch said that buoyant food and drink sales showed that the sector is recession-resistant. “Consumers are not in general letting the recession get in the way of enjoying the high standard of food and drink they consume at home,” she said.
According to the Confederation of British Industry (CBI), discounting has continued for longer than usual this year because of the economic climate, but it is too early to say whether that will help maintain February sales figures.
“There is a lot of pressure and competition in retail at the moment and that means discounting has continued,” said CBI spokesman Steven Cook. “But retailers still don’t have the confidence to plan ahead as sales will depend on the economy and access to credit.”