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Retail sales experience strongest growth since March 2010, says BRC

UK retail sales were up 3.9% on a like-for-like basis from January 2013, when they had increased 1.9% on the preceding year. On a total basis, sales were up 5.4%, against a 3.0% increase in January 2013, the strongest growth since March 2010.

The 3-month average total growth was 3.2%, back in line with the 12-month trend, now at 3.0%.

Furniture was the top performing category, achieving its best growth since April 2006, while Other Non-Food was the key contributor to overall growth.

Online sales of non-food products in the UK grew 19.2% in January versus a year earlier, the strongest January since 2009. The online penetration rate achieved 17.4% in January.

Helen Dickinson, Director General, British Retail Consortium, said: "Our figures for January show strong growth but a story of two halves. With a record number of people now in work and the continued recovery in the housing market we have seen very strong performances in furniture and other non-food items. These figures are better than expected given the continued squeeze on personal finances but official figures show that this is not built on personal debt which remains below pre-recession levels.

"Customers responded enthusiastically to a range of sales and promotions on non-food items this January. Retailers succeeded in tempting shoppers in with promotions, they also saw strong demand across new ranges, helped by improvements in consumer confidence. This was not the case in food which in contrast saw very low levels of growth in the last quarter.

"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."

David McCorquodale, Head of Retail, KPMG, said: "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.

"Other than the grocers, retailers will feel heartened by these post-Christmas figures. The divide between food and non-food is stark, with the battle for market share in food remaining ferocious, customer loyalty fickle and cost deflation being passed through to the consumer.

"In non-food, there were a number of factors at play, all of which helped to boost sales. The weather in January 2014 was wet and windy but not, from a retail point of view, disruptive, snowy and cold like last year. A strong performance in furniture, flooring and home accessories hints that the recovery in house prices is having a positive knock on effect. The early weeks of the month reflected strong growth in clothing and other non-food, hinting that post-Christmas sales campaigns had boosted the top line: only time will tell at what cost to the bottom line."

Source : Helen Dickinson - BRC Director General
www.brc.org.uk/brc_news_detail.asp?id=2579

11 February 2014
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