Challenging January for Retailers: Weather and Cost of Living Pressures Cast Shadow
Challenging January for Retailers – January proved to be a challenging month for retailers, with adverse weather conditions and the ongoing strain of rising living costs contributing to lacklustre consumer spending post-Christmas, according to recent research.
Challenging January for Retailers: Weather and Cost of Living Pressures Cast Shadow
Figures from the British Retail Consortium (BRC) and KPMG revealed that total retail sales across the UK saw a modest year-on-year increase of only 1.2% in January, a sharp decline from the 4.2% growth recorded during the same period last year. Similarly, Barclays reported a meagre 3.1% year-on-year growth in consumer card spending for the month.
The recent cold weather, including storms such as Storm Isha and Storm Jocelyn, deterred shoppers from venturing out to high streets, with many opting for cosy nights in instead, enjoying popular TV shows like The Traitors.
While January sales discounts initially spurred spending in the first two weeks after Christmas, the momentum was not sustained throughout the month. Larger purchases such as furniture and household appliances remained sluggish amid persisting high living costs.
Challenging January for Retailers
Clothing and footwear sales also suffered, although there was a slight upward trend for health and beauty products. Linda Ellett from KPMG described the high street’s performance as “lacklustre,” noting that the “feel-good factor” from falling mortgage rates and easing inflation had yet to materialise at the tills.
Barclays attributed below-inflation growth figures to Britons opting to stay at home to save money and shelter from the cold weather after the festive period. Spending on takeaways and fast food saw a 5.5% year-on-year increase in January, while household expenses on digital content and subscriptions surged by 11.4%.
A Barclays poll of 2,000 consumers revealed that nearly half were utilising loyalty schemes or vouchers to save money on shopping, with 43% planning to cut down on non-essential spending due to rising bills. Despite these challenges, 70% expressed confidence in their household finances, the highest level since November 2021.
Karen Johnson, head of retail at Barclays, noted that consumers adopted a more frugal approach in January, with online retail benefiting as shoppers took advantage of sales from the comfort of their homes. While this shift resulted in subdued growth for hospitality and leisure, Johnson highlighted the resilience of consumers in finding savvy ways to manage their finances amidst economic uncertainties.
