United Kingdom retail sales edge higher in 'challenging' January

Consumer spending power has been squeezed over the past year because of rising prices

Joanne Denney-Finch, CEO Institute of Grocery Distribution (IGD), said: "Food and grocery sales stayed resilient this month, maintaining the trend from 2017".

On a total basis, sales rose 1.4% in January, against a growth of 0.1% in January 2016.

"Sales as well as profits are seemingly harder to come by". She said that the sector continued to struggle from "divided fortunes" for food and non-food sales.

However, there was a stark difference in performance between food and non-food sales, thanks to a continuing income squeeze on the back of higher inflation and weaker wage growth, leaving consumers with less spending money.

Overall spending rose by an annual 3.9 per cent, a touch slower than December's increase of 4.0 per cent and driven by the strongest increase in supermarket spending in seven months which was up 4.4 perc ent. "With that in mind, 1.4 per cent growth - or 0.6 per cent on a like-for-like basis - has to be seen as a success, albeit food sales continue to be the driver of this growth". On the same basis non-food sales dropped 1.2% with sellers of furniture, clothes and shoes suffering the first fall since September 2009.

"The going remains bumpy as consumers are still seeing wages fall in real terms", Ms Dickinson said.

The squeeze on consumer spending power hit the broader services industry, which suffered its worst month since the aftermath of the European Union referendum, and also triggered a slump in auto sales, according to industry figures that show the United Kingdom economy entering the new year on a downbeat note.

Payments firm Barclaycard painted a similar picture to the BRC on Tuesday, saying its card users upped the pace of spending on essentials in January while increases in spending on non-essentials slowed.

Barclaycard also recorded a double-digit rise in pubs and restaurants - up 12.8 per cent and 10.5 per cent respectively.

"But faltering confidence levels across the board suggests that consumers are feeling the effects of a post-Christmas slump, as well as the wider impact of inflation, on their everyday lives", Mr Lockstone said.

"While spending on the "experience economy" proved to be a natural and welcome antidote to the January blues, the dip in sentiment revealed by our consumer confidence data, allied to concerns over economic and political uncertainty, is quite telling", he said.



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