15 Feb 2019
The retail industry benefited from a big New Year bounce after a tough end to 2018, with hopes that February – the month of love – will keep high street hearts beating.
“This is an encouraging start to the year for the retail industry which is currently in the midst of a storm following one of the worst Christmas trading periods for a decade, coupled with the ongoing uncertainty surrounding Brexit.
“We always expect to see sales in January, especially in clothing, but to see the overall quantity sold jump by more than four per cent is surprising – there may even be an element of consumers stockpiling ahead of Brexit.
“Without wanting to tempt fate this appears to have coincided with a very recent slowdown in the number of businesses entering administration or liquidation, at a time when both Dunelm and New Look have recently posted positive results after taking action with their online proposition and store portfolio respectively to address their bottom lines.
“However amid the growth in volume sold in January, one has to question how much this is at the expense of profits.
“While wage growth exceeding inflation is great news for consumers who will have more disposable income, it is too early to suggest that this will encourage more spending on a long-term basis, particularly given people’s ongoing concerns about what is going to happen once the UK eventually leaves the EU.
“February is another big month for retailers, with Valentine’s Day, which may have come at the perfect time to try and help the high street build some momentum and achieve some consistently positive trading.”