UK retail sales growth slowed last month, figures on Tuesday showed, with consumers reining in spending amid rampant inflation.
According to the latest British Retail Consortium-KPMG tracker, UK retail sales rose by 4.2% on-year in January. Growth slowed markedly from 12% a year earlier. It was also down on the three-month average of 5.2%.
On a like-for-like basis, sales rose 3.9% yearly in January, slower than the 4.9% three-month average.
"With inflation running at around 10%, sales growth for January nearly halved in comparison to December to just over 4% - sending a clear signal that consumers have started the year with a tight rein on spending as they face another period of rising costs," KPMG analyst Paul Martin commented.
Food sales increased 8.0% in the three months to January. Non-food sales increased 2.9%.
BRC chief executive Helen Dickinson commented: "As Christmas cheer subsided, retailers felt the January blues as sales growth slowed. Many retailers discounted heavily to entice consumer spend, and while there were bargains to be had in the January sales, retailers continue to be hit by lower margins and falling volumes. Own brand ranges remain popular across food and non-food products, and big ticket items are seeing customers trade down.
"The coming months will continue to be challenging for retailers and their customers. Consumer confidence remains stubbornly low and looming rises in household bills and mortgages mean discretionary spending will remain weak. With ongoing cost pressures and labour shortages increases in sales don't convert into increases in profits or cash."
January inflation figures are due next week; the Bank of England last Thursday said that inflation had turned the corner and would fall back towards the end of this year as energy prices fall.
