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Slow growth in clothing and footwear sales contribute to dismal January for retail

Slow growth in clothing and footwear retail sales helped contribute to the second worst January sales performance since 1995, according to the BRC-KPMG Retail Sales Monitor.

Growth across clothing and footwear retailers slowed in January with consumer caution leading shoppers to seek out promotions as like-for-like retail sales values dropped 0.3% compared to January 2011.

The January sales performance is the second worst in the 17 year history of the BRC-KPMG Retail Sales Monitor, with only January 2010 recording worse figures since 1995. On a total basis, however, sales were up 2.1%.

Non-food sales were weakened and any gains were largely driven by widespread heavy discounting in clearance Sales.

Clothing

After a strong December, sales growth for clothing slowed to near zero with womenswear suffering the most. Menswear and kidswear showed year on year gains but it was much smaller than the figures seen in December.

Consumer caution continued to affect trade and most sales were driven by discounts with many shoppers waiting to buy big ticket items such as coats and dresses in the Sales. Handbags and jewellery proved popular choices in the Sales as consumers looked to update existing clothes rather than buying whole new outfits.

Footwear

Promotions and clearance markdowns helped to attract shoppers looking for a good deal but sales growth still slowed compared to December. Women’s footwear was the main reason for the slowdown with men’s and children’s footwear holding up.

The sales of boots slowed after many pairs were bought in previous Sales. Due to shoppers’ purse strings being tightened value lines remained a favourite along with single purchases of ‘multifunctional’ styles rather than buying several pairs for different occasions.

Department stores

Across department stores any sales growth was largely driven once again by clearance and promotions with heavy markdowns frequently needed to sell winter clothing and footwear although there was some interest in new spring 12 ranges.

Internet and mail order

Non-food, non-store (internet, mail order and phone) sales growth slowed after a surge in December (up 18.5%) but sales were still up 11.3% compared to last year.

Consumer confidence was hit by a return to reality after Christmas with many shoppers carefully researching to benefit from clearance markdowns.

 

Stephen Robertson, director general at the British Retail Consortium, said: “As 2012 gets underway, it’s clear people don’t feel any better about the immediate future than they did 12 months ago. Customers parked their worries in December and spent, encouraged by discounts. Now, in the New Year, reality has bitten again as concerns about jobs, wages and household costs reassert themselves.

“Despite consumer confidence improving in January, actual spending shows households concentrating on paying off debt, saving and battening down for another tough year.”

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