Online spending was higher in January than it was a year ago, but less than it had been in the previous month of December 2016, according to official figures.
Today’s ONS Retail Sales Report estimated that ecommerce sales grew by 10.1% last month, compared to the previous January, while overall retail sales grew by 1.5% in volume and by 3.4% in value – as average store prices rose by 1.9% – on last year. Ecommerce accounted for around 14.6% of all January spending.
But, the ONS figures suggested, retail spending in January was lower than in December. Overall, the number of retail transactions fell by 0.3% in volume, but stayed flat in value. was down by 0.3% in volume, while it stayed flat in value. Online sales were down by 7.2%.
ONS senior statistician Kate Davies said: “In the three months to January, retail sales saw the first signs of a fall in the underlying trend since December 2013. We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown.”
Online, ecommerce spending at department stores grew fastest (+19.7) to account for 13.7% of all sales. Spending in household goods stores was up by 11.8%, to account for 9.7% of spending. Textile, clothing and footwear spending rose by 9.7% to account for 14.2% of spending.
Despite today’s data, it’s not all doom and gloom, with many retailers I speak to still achieving good results and optimistic about their prospects for the future.
Ian Gilmartin, head of retail and wholesale at Barclays, said: “Inflation is the buzzword on everyone’s lips at the moment, and cost and pricing considerations are now justifiably the focus of attention for retailers. The current inflation growth is being driven by fuel and food price increases, which is eating into the level of disposable income available to consumers for other purchases. Last year retailers largely resisted passing on costs to their customers, but we are now also observing smaller price rises right across the retail sector.
“With further pressure ahead for many retailers from business rate changes, we can expect more price rises in the coming months, with the extent of these price moves dependent on how effectively costs can be managed. It’s likely that the retailers who can adapt successfully and make the right judgement calls on their price points will have the most success this year.”
Paul Martin, UK head of retail at KPMG [IRDX VKPM], said: “The ONS retail sales figures confirm that higher pricing has resulted in a tightening of purse strings. However, it’s also worth remembering that January typically sees consumers claw back following a festive splurge in December.
“With the figures revealing the first fall in quantity of goods bought in the 3 month to January 2016 since December 2013, it is clear shoppers are beginning to take note of consumer price inflation. Previously they had carried on as normal following the Brexit vote and had even defied consumer confidence indices.”
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