The best January report for 3 years?

Published: 01 February, 2007

The better-than expected sales performance over Christmas has continued into the new year, according to the latest Retail Sales Monitor from KPMG and the BRC. UK retail sales were up 3.1 per cent on a like-for-like basis, compared with January 2006, when sales had risen only 0.2 per cent after a strong Christmas.

The three-month trend rate of growth edged up to 2.1 per cent from 1.9 per cent in December, for like-for-like sales, and to 4.1 per cent from 4.0 per cent for total sales, reflecting the continued growth of retail space. Food sales were the strongest. Clothing sales slowed, despite heavy discounting, and furniture fell further below the levels reported this time last year. Home accessories, electricals and DIY showed good gains.

Clearance sales achieved strong growth but often at the expense of margins.

BRC director general Kevin Hawkins said: "This is the best January report for three years. It comes, however, with a strong note of caution. Much of the growth has been driven by the grocery sector and discounting has been widespread in several other categories. The November and January interest rate increases have yet to make themselves felt. No one should start clamouring for another rate rise on the basis of these figures."

Helen Dickinson, head of retail at KPMG added: "Not a bad set of results on the face of it, with like-for-like sales in January being 3.1 per cent, the highest monthly increase since July 2006. However, it merely reflects the continuation of the trend which we saw in December, whereby it was only strong sales late in that month that gave many retailers something to cheer about over Christmas."

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=== BRC/KPMG Retail sales monitor UK - Jan 2007 ===

Year-on-year like-for-like (January 2007 v January 2006) UP +3.1%

Year-on-year total sales (January 2007 v January 2006) UP +4.1%