The latest figures from the British Retail Consortium report that UK total retail sales increased by 2.6% year on year in January.
January sales kicked off a solid month for retail with stores delivering their strongest growth in almost two years, albeit on a weak comparable. Consumers headed to the shops to refresh their homes for the year ahead, taking advantage of big discounts on furniture, bedding and other home accessories. While the bouts of stormy weather put a temporary dampener on demand, sales growth held up well throughout the rest of the month.
“Whether this strong performance can hold out for the coming months is yet to be seen,” said Helen Dickinson OBE, chief executive of the British Retail Consortium. “Inflationary pressures are rising, compounded by £7bn of new costs facing retailers, including higher employer national insurance contributions, higher National Living Wage, and a new packaging levy. Many businesses will be left with little choice but to increase prices, and cut investment in jobs and stores. Government can mitigate this by ensuring its proposed business rates reforms do not result in any shop paying more in business rates.”
Linda Ellett, UK head of consumer, retail and leisure, KPMG, said: “The trading environment remains tough for retailers, with consumer demand still subdued and household essential bills still high. Business costs are also coming under pressure, with rising employment costs only increasing that in the coming months. Boardroom focus on costs and competitiveness is sharpening. Pricing adjustments, product launches, store closures, job losses, and increased automation and AI are all set to reshape the retail landscape in 2025.”
