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Paul Martin, UK Head of Retail at KPMG, said:
“Retailers will be relieved that we started the year without further lockdowns as consumer demand continued on the high street with sales up 11.9% on last year. However, this unusually strong performance for January should be put in the context of last year’s lockdown restrictions.
Footwear, furniture and jewellery saw strong sales growth in stores whilst spending on food and drink, toys and computing all fell during January.
Unsurprisingly, online sales were down across all categories compared to the lockdown spending of January 2021, with items for the home seeing the biggest fall in sales volumes.
With Covid restrictions easing, and people heading back to workplaces, retailers will be hoping consumer confidence remains robust to help offset likely ongoing rising cost challenges. We could see a difficult few months ahead if wider macroeconomic conditions start to squeeze household incomes to the point that they start cutting back on spending.
Retailers are facing their own inflationary pressures. There will be some tough decisions to make on whether, and how, to pass on the increased costs, that they may have been sitting on for some time, to consumers facing their own financial challenges.
We could easily see the health of the sector start to deteriorate if consumers choose to continue saving to weather the storm.”
How will the UK economy impact retailers this year? Read KPMGs latest UK economic outlook – also released today - here.
Look back at December's BRC-KPMG Retail Sales Monitor:
