January retail sales in the UK experienced a significant decline as consumers tightened their budgets after the holiday season and faced the national lockdown that forced non-essential stores to close. The British Retail Consortium (BRC) reported a 36.5% drop in total sales for ‘non-essential’ stores on a three-month basis, and a 19.8% decrease on a like-for-like basis. In contrast, online sales skyrocketed by 83%, representing the highest year-on-year increase on record.

However, stores deemed ‘essential’ fared better, with like-for-like sales increasing by 7.1%. As a result, the overall retail sales in the four weeks leading up to January 30 only experienced a 1.3% decline compared to the previous year. While this decline is lower than the three-month average growth of 0.3%, it is still higher than the 12-month average decline of 0.4%.

BRC CEO Helen Dickinson acknowledged the impact of the current lockdown on non-essential retailers, stating that the new variant of the virus has reduced consumer confidence, particularly in clothing and footwear purchases. She also praised retailers for their efforts to expand online delivery and click-and-collect services during the lockdown, leading to record growth in online non-food sales. Dickinson highlighted the resilience and innovation displayed by the retail industry in adapting to the challenges posed by the pandemic.

Paul Martin, the UK head of retail at KPMG, noted the first monthly decline in total sales since last spring, despite continued demand for groceries and home-related categories. Martin emphasized the significant growth of online channels, revealing that over 60% of all non-food sales were conducted online. However, the traditional January sales period had minimal impact on the rest of the retail sector, with only a few categories experiencing growth.

These figures underscore the struggles faced by the fashion industry, as clothing and footwear sales were severely affected by the lockdown and reduced consumer confidence. Conversely, e-commerce has thrived during these challenging times, highlighting the importance of online platforms and delivery logistics for retailers in adapting to the evolving consumer landscape.

In conclusion, the January retail sales figures demonstrate the contrasting fortunes of different sectors within the industry. Non-essential retailers have been hit the hardest by the lockdown, while essential retailers have seen more positive results. The continued dominance of online sales emphasizes the necessity for retailers to prioritize their digital strategies and invest in e-commerce capabilities to remain competitive in the current climate.

Helpful links related to the article:
1. BRC’s Latest Retail Data
2. KPMG’s Insights on Retail