Surprise as January retail sales fall

15 February 2013

Posted by Satvir Bhullar

Retail sales in the UK suffered an unexpected fall in January, figures from the Office for National Statistics (ONS) have revealed.

Volumes dropped by 0.6 per cent, bringing an end to the year-on-year growth the retail sector has experienced since August 2011.

Small stores suffered the greatest decline in sales, with those who have up to nine employees the hardest hit. It is believed the heavy snowfall that affected many areas of the UK throughout January played a big part in this fall.

The food sector in particular experienced a drop in trade, with sales volumes estimated to have fallen by 2.6 per cent to the lowest level since April 2004. However, the proportion of food sales made online increased by just over 27 per cent, compared to January 2012.

This equates to 3.7 per cent of total sales in the sector, which is the highest figure on record. Many large retailers actually saw sales grow in January and it has been suggested this is due to online shopping's increased popularity.

The number of online sales throughout the retail industry accounted for more than ten per cent of total volume. A figure such as this is generally only seen during the build-up to Christmas and represents an 8.7 per cent increase on January 2012.

While the number of sales fell, the total amount spent in January was unchanged from that in 2012.

George Buckley, Chief UK Economist at Deutsche Bank, told BBC News he is disappointed with the figures.

He said: "If you define Christmas sales as the November to January period, this has been the second worst performance over the festive/sales period over the past 15 years."

Mr Buckley added: "Perhaps some of today's weakness reflects higher inflation, which has risen by 0.5 percentage points over recent months."

The figures released by the ONS are estimates based on a monthly survey of 5,000 UK retailers. They cover the period from 30th December 2012 to 26th January 2013.

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