Retailers weather storm to spring surprise
The key findings from the latest retail sales for Great Britain from the Office for National Statistics showed:
• In the three months to January 2019, the quantity bought increased by 0.7% when compared with the previous three months. • The monthly growth rate in the quantity bought increased by 1.0% in January 2019, following a decline of 0.7% in December 2018. • Year-on-year growth in the quantity bought in January 2019 was 4.2%, the highest since December 2016; while year-on-year average store prices slowed to 0.4%, the lowest price increase since November 2016. • The quantity bought in textile, clothing and footwear stores showed strong year-on-year growth at 5.5% as stores took advantage of the January sales, with a year-on-year price fall of 0.9%. • As food store prices experienced a general slowdown throughout 2018, the quantity bought in January 2019 returned to the strong growth experienced in the summer months at 3.2%. • Online sales as a total of all retailing decreased to 18.8% in January 2019, from the 19.8% reported in December 2018.
Phil Mullis, Partner and Head of Retail and Wholesale at leading accountancy firm, Wilkins Kennedy, said:
“This is an encouraging start to the year for the retail industry which is currently in the midst of a storm following one of the worst Christmas trading periods for a decade, coupled with the ongoing uncertainty surrounding Brexit.
“We always expect to see sales in January, especially in clothing, but to see the overall quantity sold jump by more than four per cent is surprising – there may even be an element of consumers stockpiling ahead of Brexit.
“Without wanting to tempt fate this appears to have coincided with a very recent slowdown in the number of businesses entering administration or liquidation, at a time when both Dunelm and New Look have recently posted positive results after taking action with their online proposition and store portfolio respectively to address their bottom lines.
“However amid the growth in volume sold in January, one has to question how much this is at the expense of profits.
“While wage growth exceeding inflation is great news for consumers who will have more disposable income, it is too early to suggest that this will encourage more spending on a long-term basis, particularly given people’s ongoing concerns about what is going to happen once the UK eventually leaves the EU.
“February is another big month for retailers, with Valentine’s Day, which may have come at the perfect time to try and help the high street build some momentum and achieve some consistently positive trading.”