Months of political uncertainty have ingrained a “thrifty approach” among UK shoppers, leading to a slow start to 2020 for retailers.
Total retail sales were up by just 0.4% in January, compared with a 2.2% rise in the same month last year, found the British Retail Consortium (BRC) and KPMG’s Sales Monitor report.
UK retail sales were flat on a like-for-like basis from January 2019, when they increased by 1.8% compared with the previous year. Non-food retail sales declined by 3% on a total and 3.3% on a like-for-like basis in the three months to January.
Helen Dickinson, chief executive of the BRC, said: “Across the UK, retailers are facing tighter margins as a result of weak consumer demand and increasing costs, including sky high business rates. We need to see a commitment from government to bring down the overall burden of business rates in its upcoming review.
”In the short term, a move in the Budget to address transitional relief, which has seen retailers subsidising other industries by almost £500m since 2017, would prevent further shops closing and save jobs.”
Paul Martin, UK head of retail at KPMG, added: “January is usually a quieter month for retail, and although static sales might not appear triumphant, at least it is no further deterioration.
“Consumer confidence has started to return post-general election, but we have not experienced any major leaps for the sector yet. We have to remember: this semi-positive performance will also be the result of aggressive discounts and consumers’ preoccupation with bagging a bargain. That’s not always good news when looking at bottom lines.”