Retail sector boosted by strong January performance
According to figures released by the Office for National Statistics, the struggling retail sector has been boosted by a strong performance in January.
2019 was a historically bad year for the retail sector, with a 0.1 per cent fall in total sales, the first time this has happened since 1995.
Despite this poor performance, the amount of goods sold in January rose by 0.9 per cent, the first increase in the last three months. This increase was also the largest rise since last March and was higher than economists had previously expected.
January’s strong figures have not helped to salvage the quarter however, with the three months to January seeing a decrease of 0.8 per cent in the amount of goods bought. This decline, according to Rhian Murphy, head of retail sales at the ONS, was felt “across all sectors.”
The increase in sales volume was largely driven by growth in food store sales, which increased by 1.7 per cent, and non-food store sales, which increased by 1.3 per cent. The increase in non-food store sales was largely down to a 3.9 per cent increase in the sales of clothing, although department store sales did also increase by 1.6 per cent.
The biggest decline was felt in fuel sales, which decreased by 5.7 per cent compared to the previous month. This coincided with the increase of fuel prices by 2.3 pence per litre and the end of the Christmas period, where travelling across the country is far more common.
Responding to these figures, Aled Patchett, the head of retail and consumer goods at Lloyds Bank Commercial Banking, said January’s performance showed the economy may now be on “surer footing” but cautioned: “While the ‘Boris-bounce’ appears to have boosted consumer confidence and improved the mood among retailers, many are continuing to forecast with caution in mind, having endured a difficult Christmas – something that was reflected in the smaller-than-expected discounts in January.”