After a strong Christmas season, some retailers may be feeling disappointed about the slow start to 2017, with retail sales down 0.6 per cent on a like for like basis in January.
Food sales did however increase 0.6 per cent over the three months to January on a like-for-like basis and 2.0 per cent on a total basis, well ahead of the 12-month total average growth of 1.0 per cent.
Over the same period, non-food retail sales in the UK rose 0.2 per cent on a like-for-like basis and 0.3 per cent on a total basis. This is below the 12-month total average growth of 0.8 per cent.
Online sales grew 8.6 per cent while in-store sales dipped 2.2 per cent on a total basis and 2.4 per cent on a like-for-like basis.
Helen Dickinson, Chief Executive of the BRC says: “After a strong end to the Christmas trading, year on year sales growth ground to a halt, compensated only by stronger furniture sales and a boost for some retailers from Chinese New Year. 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.
“Looking across the last three months, we’ve seen the slowest growth of the festive period since 2009. Closer inspection reveals that this was driven by slowing sales in non-food sectors.
“These figures suggest that 'caution' was top of new year shopping lists and the uptick in credit card lending at the end of the last year may be short lived. With the signs pointing to upward pressures on shop prices given rising import costs, all eyes will be on the impact of inflation on consumer spending. That said, retailers are a resilient and innovative bunch. They have become increasingly adept at responding to the challenging environment, and as a result the industry has been a key driver of recent UK productivity growth.”
With ‘caution’ being the watchword for 2017, retail businesses must focus on winning customer loyalty, increasing productivity, strengthening their market position and maintaining a healthy cashflow.
Our business experts at Beavis Morgan work with a number of retail businesses, helping them with strategic planning, system implementation, business turnaround and improving business performance for the future.
We are available to structure your business with cashflow and profit forecasting to measure performance and maximise opportunities.
For further information about how we can help you and your retail business, contact Steve Govey or your usual Beavis Morgan Partner.