British consumers were reluctant to return to high streets after a busy Christmas, as new figures show that smaller retailers experienced a slow January trading period.
Research by the British Retail Consortium (BRC) revealed that UK retail sales in January grew by just 0.1 per cent on the same month in 2016 – the weakest performance for the sector since August 2016. The disappointing month for retailers followed December’s year-on-year sales increase of 1.7 per cent.
Commenting on the slow January trading period, BRC chief executive Helen Dickinson suggested that “caution was top of the new year shopping list” for many consumers.
“Looking across the last three months, we’ve seen the slowest growth of the festive period since 2009,” she said.
Currency devaluation has increased import costs for retail owners in the UK, and a majority of small business owners have warned that they are expecting to raise prices over the next year.
With the Bank of England’s latest inflation forecast for 2017 now at two per cent, retailers could experience a further hit on sales as consumers cut back on non-essential items.
Paul Martin, head of retail at KPMG, warned that the double squeeze of rising inflation and higher costs would force retailers to reassess sales strategies.
“With consumer price inflation beginning to kick-in alongside retailers’ costs also rising, the sector will need to continue to examine its cost-base as this will be a vital element of success in 2017,” he said.
However, Dickinson added that “retailers are a resilient and innovative bunch”, and would find ways to keep shoppers interested.
“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,” she concluded.
Not all retailers experienced poor January trading. Food and drink sellers enjoyed a two per cent increase in sales in the three months leading January compared to 2016 figures.
Looking to boost sales for 2017? Read on to find out how to build long-term relationships with your offline customers
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