Following reports that shop vacancy rates are at a four year low, the latest British Retail Consortium (BRC) and KPMG Retail Sales Monitor makes further good reading for the high street.
The report shows that like for like sales in January grew by 3.9 per cent when compared to figures from the previous year, while total sales growth totalled 5.4 per cent. This means that last month saw the strongest growth in retail sales since March 2010, indicating a sustained improvement in confidence amongst British consumers.
In part, this performance was due to a boom in furniture and homeware sales brought about by the strong demand for residential property throughout the UK. The government’s Help to Buy scheme has seen a marked increase in young professionals seeking to set foot on the housing ladder, and it therefore seems logical that many wished to furnish their new homes on a budget by way of the January sales with bedroom furniture and sofas proving to be particularly popular.
Head of retail at KPMG, David McCorquodale, believes retailers will be “heartened” by the news but warns that sales will not necessarily translate into strong profits for all.
He says; “These figures mark a strong start to the year for retailers.
“Most will take much from the positives and see genuine light at the end of the tunnel.
“However, behind the scenes some have had to discount heavily to secure these sales and will now be counting the cost of this strategy – others have genuinely beaten expectations.”
Unfortunately, it appears that the recent trend for poor food sales continued into January despite a run of promotions from the country’s leading supermarket chains. Food sales fell by 1.2 per cent on a like for like basis during the past three months, meaning that the 4 per cent increase in non-food sales had to make up a certain deficit within the retail industry.
BRC director general Helen Dickinson remains cautious about the outlook for the retail industry, pointing out that sales in the early part of last year were largely distorted by the heavy snowfall experienced by much of the UK. However, she concedes that the flooding affecting widespread areas of the south of England at present will have had a similarly dampening impact upon sales, and so believes only the coming months will tell whether the retail industry is truly reaping the benefits of economic recovery.
She concludes; “January’s figures set 2014 off to a good start, however comparisons are against soft non-food sales in January 2013, which will not be the case in February.
“Given the underlying conditions, it remains to be seen how the trend for the rest of the year will pan out.”
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