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Linda Ellett, Head of Consumer, Leisure & Retail at KPMG, said:

"It may be a new year, but the hangover of low consumer confidence remains, with retail sales growing by a lacklustre 1.7% on the high street, and online operators seeing yet another month of negative sales performance.

Health and beauty purchasing continued to drive sales both on the high street and online, whilst sun seekers and consumers with healthy resolutions front of mind, gave a boost to sports and travel equipment sales, which were up over 4% year on year.

The extraordinary weather conditions across large parts of the country did little to encourage shoppers out on to the high street, whilst continued industrial action on the rail network was unhelpful for city centre locations. Whilst there are some positive signs that mortgage rates are starting to fall and stabilise, and shop inflation has fallen to its lowest level in over a year the feel good factor has yet to materialise at the tills.   

It remains a difficult environment for retailers facing into significant downward pressures on demand, a strong promotional environment and uncertainty hitting supply chains due to rising geopolitical tensions.  Retailers will be hoping that continued good news on the economy, coupled with the small boost given to some consumers as cuts in national insurance start to feed through to pay packets will boost confidence and convert to sales.  With increases in labour costs and business rates around the corner, retailers will be hoping for good news in the Chancellors’ upcoming Budget to give consumers that lift they need to start spending again.”

The BRC KPMG Retail sales monitor is one of the UK’s most timely, and accurate performance indicators for UK sales. Read the full report complete with sales data from the British Retail Consortium.

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