London’s index of leading shares remains tightly tethered to last night’s closing value
- FTSE 100 little changed
- UK retail sales fall 1.3% in January
- Ocado delivers unpopular news
UK retail sales fell by 1.3% in January from a year earlier, according to figures released this morning by the British Retail Consortium (BRC).
In the previous month, sales had been up by 1.8%, according to the BRC’s figures.
January’s sales levels were the lowest since May, adding to evidence that the current lockdown is much worse for retailers than November’s lockdown was, according to Samuel Tombs, the chief UK economist.
“BDO’s High Street Sales Tracker stuck an even worse note, with non-food sales values falling -10.0% year-over-year in January, the biggest fall since June, though it will have missed the lockdown-related boost to food sales. Similarly, Barclaycard has reported today that households’ overall expenditure was down 16.3% year-over-year in January, much worse than December’s 2.3% drop, though its measure tends to fall further than retail sales during lockdowns,” Tombs reported.
“Meanwhile, the BoE’s CHAPS data show that the value of transactions on credit and debit cards was 34% below its February 2020 level last month, much worse than the 4% shortfall seen in January 2020, confirming that last month’s drop isn’t merely due to usual seasonal variations. In the round, then, we judge that these surveys are broadly consistent with a 4% month-to-month drop in the official measure of retail sales volumes excluding petrol, which would leave it 6.5% below its October 2020 peak. Alas, however, these surveys have been an imperfect guide to the official data in recent months,” Tombs lamented.
“On a more positive note, both the BDO and CHAPS data show that sales edged higher over the course of the month, potentially suggesting that consumers’ confidence is recovering, now that virus numbers have fallen sharply and vaccines have been rolled out quickly. What’s more, the rapid decline in Covid-19 cases suggests that the government will lay out plans later this month for non-essential retailers to reopen in the second half of March. Accordingly, light is now visible at the end of the tunnel for high street retailers,” Tombs suggested.
Sales increased by 7.1% on a like-for-like basis in January and online sales grew at record levels.
The BRC reported that 63.8% of non-food sales happened online in January, almost exactly double the level in January 2020.
Nick Bubb, the independent retail analyst, said ‘food good/non-food bad’ was always likely to be the main theme of today’s figures from the BRC but suggested that the overall figures “were a bit weaker than might have been expected”.
“The exact Food/Non-Food split of total sales last month is buried within the 3-month moving averages (of +7.9% and -5.6% respectively), but it looks to us as if total Food sales growth was at least 8% and that…