Food sales prop up retail fortunes during January

Helen Cahill
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Inflation is expected to ease off this year (Source: Getty)

Retailers benefited from a rise in sales in January as inflation continued to push up food sales.

Retail sales rose 0.6 per cent on a like-for-like basis last month, according to data released today by the British Retail Consortium (BRC) and KPMG.

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The sales landscape remained divided, with inflation pushing up sales growth in food, while sales fell on non-food items as consumers cut their discretionary spending.

Over the three months to January, store sales of non-food items slumped 3.6 per cent on a like-for-like basis.

Meanwhile, like-for-like food sales grew by 2.9 per cent.

Helen Dickinson, chief executive of the BRC, said: “The persisting tough trading environment played out at the start of the year with a mixed set of trading updates and subsequent announcements.

“Sales as well as profits are seemingly harder to come by. Against this challenging back-drop, 2018 didn’t have a bad start during what is traditionally a lean month, with sales creeping up in-line with the year’s average.”

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Inflation is expected to ease this year, but Dickinson said there could be a “bumpy” road ahead for consumers, depending on the outcome of Brexit negotiations.

Paul Martin, head of retail at KPMG, said that January was a “tough gig” for retailers, and that the sales growth recorded was a success for the industry. However, he said there was little growth in sectors other than food.

“Bigger ticket items such as furniture traditionally rely on strong post-Christmas trade, but this year seem to have struggled to woo consumers with the lure of a sale sign in the window,” he said.

There have been significant signs of distress in the retail industry, for both non-food and food retailers.

High street fashion chain East fell into administration at the end of January, putting 314 jobs at risk. This followed on from a difficult 2017, when Deloitte recorded a 28 per cent jump in retail administrations, the first rise in retail administrations for five years.