Retail sales begin year rising at the fastest pace since last March but the amount we’re spending on fuel and online slips
- Retail sales increased by 0.9% month-on-month in January, new ONS figures say
- But, in the three months to January, amount of goods snapped up slipped 0.8%
- Higher prices at the pumps triggered a drop in fuel sales last month
Retailers have surprised gloomy forecasters by achieving modestly better than expected sales last month, new official data shows.
Sales increased by 0.9 per cent after being given a boost by ‘moderate growth’ in both food and non-food stores, the Office for National Statistics said.
While the last month saw an upturn in retail sales, in the three months to January the amount of goods snapped up by shoppers fell by 0.8 per cent.
Sales growth: Retailers have surprised gloomy forecasters by achieving modestly better than expected sales last month
With prices at the pumps around 2.3p a litre higher in January than in December, fuel sales slipped by 5.7 per cent last month.
The proportion of retail sales made online also fell last month, dipping from 19.3 per cent to 19 per cent.
The retail landscape remains torrid, with a string of big-name shops posting dismal results and profit warnings, amid a toxic mix of sky-high business rates, fierce competition and shopper demand for cut-down prices.
Home and fashion retailer Laura Ashley unveiled a £4million half-year loss today, while the John Lewis Partnership warned last year that its annual staff bonus faces being axed amid dwindling profits.
Meanwhile, Marks & Spencer’s profits have been hampered as it battles to win back shoppers fed up with men’s skinny jeans, frumpy womenswear and seemingly endless online stock problems with their most popular lines.
The bigger picture: Month-on-month retail sales have risen, but the picture for the three months to January is less rosy
Tough times: The John Lewis Partnership has warned it could axe its annual staff bonus
In its latest snapshot of the retail sector, the ONS revealed that sales of clothes and shoes jumped by 3.9 per cent over the month.
There are a number of different sub-sectors within the retail landscape and their performance over the past month varied significantly.
While total sales across all sectors rose in the last month, online sales at shops selling household goods fell over 26 per cent month-on-month and department stores saw sales fall by 4.8 per cent. Food sales jumped 1.7 per cent month-on-month, although they were down 0.3 per cent year-on-year in January.
Challenging market: M&S faces stiff competition from rivals amid dwindling profits
Rhian Murphy, ONS head of retail sales, said: ‘Retail sales fell overall in the latest three months with declines across all sectors.
‘This was despite a rebound in January with strong growth for most stores, although petrol stations saw a large decline which coincided with an increase in their fuel prices.’
Howard Archer, chief economist at the EY Item Club, said: ‘January’s healthy rise in retail sales raises hopes that a marked rise in consumer confidence following December’s decisive General Election has at least temporarily lifted their willingness to spend.’
What are we buying? There were lower fuel sales in January, new ONS data reveals
He added: ‘A key factor for growth prospects is will this improvement in confidence continue and will it translate into greater willingness to spend on a sustained basis?
‘The fundamentals for consumers are likely to be pretty decent over the coming months with employment high and real earnings growth at a reasonable level. Indeed, employment rose 180,000 in the three months to January to be at a record high of 32.934 million while real earnings growth was a respectable 1.4%.
‘Nevertheless, earnings growth has moderated since mid-2019 and we suspect that employment growth will likely be lower overall in 2020 than in 2019.’