UK retail sales 'poor' in January, expect February weakness too - CBI
January retail sales in the UK were deemed “poor” by retailers, with a net balance of -23% from -2% in December and dipping for the first time since September. That’s according to the CBI’s latest Distributive Trades Survey. What’s more, retail sales are expected to remain below seasonal norms (with a net balance of -17%) next month too.
Meanwhile, online sales were weaker in the year to January (-2% from +3% a month earlier) and are expected to remain broadly flat in the year to February.
The survey of 101 firms (including 42 retailers) conducted between 22 December and 18 January covered the period when the UK was operating under tightened Covid restrictions amid the spread of the Omicron wave, the report noted.
Despite the overall weakness, a net balance of 28% of retailers said sales grew at an above average pace in the year to January, up from 8% in December. But this compares sales this month with January 2020 when Covid restrictions required non-essential retail stores to close across the UK so is hardly impressive.
Across the distribution sector, stock volumes in relation to expected sales were seen as too low, after being broadly adequate last month, with relative stock levels seen as too low in each of the three main sectors. Again, relative stocks are expected to remain too low in February.
That’s likely to have been a reaction to supply chain issues that have beset retailers globally.
Ben Jones, lead economist at the CBI, said: “It was not surprising that retail sales dropped back below seasonal norms in January, given the spread of Omicron, the reintroduction of restrictions late last year and increased consumer caution.
“Even as cases fall and Omicron-related restrictions are rowed back, retailers will be looking to the year ahead with a degree of concern. The sector faces an inflation double whammy, as rising energy and transport costs erode households’ spending power and retailers’ own costs continue to mount.
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