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Consumers hold back on spending in January following strong Christmas period

By Vivian Hendriksz

7 Feb 2017

London - UK consumers held back on spending during the month of January which saw retail sales growth "ground to a halt" on the back of a strong Christmas trading period, according to the latest data from the BRC-KPMG retail sales monitor.

UK retail sales dropped by 0.6 percent like-for-like during the first month of the year in comparison to the 2.6 percent growth reported during January 2016. However, non-food retail sales during the three months to January 2017 increased 0.2 percent on a like-for-like basis.

"While this may appear disappointing overall, retailers were up against a strong January last year to try and deliver a repeat performance and many reported an increase in the number of returns received in January," commented BRC chief executive Helen Dickinson.

However, online sales outperformed retail sales during the same period, increasing 8.6 percent over the three months to January in comparison to in-store sales which declined 2.2 percent. Online sales of non-food products grew 8 percent year-on-year in January, which was lower than the 14.9 percent growth reported in January 2016.

"Unlike the chilly high street, online retail sales continued to grow in January," commented Paul Martin, UK head of retail at KPMG. "The month’s cold snap is likely to have encouraged high street hibernation, with shoppers preferring to browse from the comfort of their own homes."

"Indeed, consumer focus really did turn indoors during the month, with sales of furniture and other household items performing particularly well. Footwear sales on the other hand continued to struggle and infrequently made it to e-checkouts."

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