07 Mar 2018

Health on the agenda for January retail sales

This morning’s retail sales figures for January were less than plump, although there was a glimmer of hope as consumers kick started a healthier New Year.

The key findings from the Retail Statistics showed:

  • The main contribution to the year-on-year growth came from non-food stores, with sports equipment, games and toys increasing sales in the quantity bought in this sector by 10.9%.
  • Feedback from retailers suggested that New Year’s resolutions to “get fit and lose weight” contributed to this increase of sales when compared with the previous year.
  • The monthly growth rate for the quantity bought increased by 0.1% with declines across all main sectors except non-food stores.
  • When compared with January 2017, the quantity bought in January 2018 increased by 1.6%; a slowdown to year-on-year growth when compared with an increase of 2.4% in January 2017.
  •  The year-on-year growth rate for quantity bought in food stores showed a decline for the sixth consecutive month at negative 0.9%, due largely to a continued rise in food store prices.

Phil Mullis, Partner and Head of Retail and Wholesale at top-20 UK accountancy firm, Wilkins Kennedy, said: “The amount spent month-on-month was actually the same and the small increase in quantity bought could be due to the January sales.

“We saw a glimmer of hope thanks to an increase in sports equipment. We can also take events such as Dry January and Veganuary into consideration when it comes to impact on food sales figures as people’s diet changes. The very nature of January also sees more people adopting a healthier lifestyle, so banning the booze, eating more veg and getting more exercise are as expected and these are seemingly reflected in the sales figures.

“In my opinion, this is as expected and probably isn’t a sustainable level of growth. Otherwise, the sales figures carry on the same trend as H2 2017 and are predicted to remain flat. Fallout from Christmas has seen major retailers such as Tesco, Sainsbury’s and Debenhams announce job losses as the technology landscape continues to evolve.

“This could be a sign of things to come as retailers undergo further restructuring as they adopt to new strategies. The future is less about physical stores, retailers need to be doing different things with their space that reflects a combination of online and offline. This is even more apparent as online spending dropped in January and a slowdown in growth online overall.

“Looking forward into February, perhaps we’ll be ditching our diets in favour of Valentines chocolate treats and retailers will be hoping to get a decent bite from the Chinese New Year of the dog.”

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