‘Semi-revival in fortune’ for shops

Published: Tuesday 10th February 2015 by The News Editor

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Retailers staged a “semi-revival” as they halted a sales decline last month but still experienced the weakest January performance for three years, figures showed today.

Like-for-like sales rose by just 0.2% compared to the same period last year, according to the British Retail Consortium (BRC)-KPMG retail sales monitor. It was the worst start to a year since 2012, when they fell by 0.3%.

KPMG head of retail David McCorquodale said it was a “semi-revival in fortunes” but stores were relying on discounts to drive demand.

It follows a decline of 0.4% in December after the Black Friday shopping spree dragged Christmas sales into November.

The latest figures were affected by disappointing computer and tablet sales and sales of sound systems and TVs suffering from shoppers expecting to find continued low prices after Black Friday reductions.

Food sales were also down on a like-for-like basis while toys and baby equipment, household appliances, and fashion grew.

Cold weather in January saw clothes shoppers take advantage of seasonal markdowns.

But some retailers who had offered discounts all the way through from Black Friday at the end of November suffered from low stock and availability, especially in womenswear.

On a rolling three-month basis for November to January, like-for-like food sales fell 1.8%, though this was an improvement on last month and the best since last February. Non-food sales rose 1.8%.

KPMG’s David McCorquodale said: “After a subdued December, retailers experienced a semi-revival in fortunes as shoppers took advantage of the bargains on offer in the January sales.

“These figures clearly demonstrate the difficult cycle that retailers are trapped in.

“Demand is now almost solely driven by discounts, with shoppers very reluctant to buy goods at full price in the hope that yet another sale could be just around the corner.

“This promotion-led environment risks becoming the new normal: retailers are struggling to persuade consumers to break the habit and go back to the traditional sales cycle.”

BRC director general Helen Dickinson said the figures compared to a bumper January a year ago and growth against such a tough comparison showed the industry to be “in rude health”.

She said: “Customers were offered attractive bargains on winter ranges but it remains to be seen at what cost to the retailers’ margins.”

Published: Tuesday 10th February 2015 by The News Editor

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